End the double taxation problem
October 16, 2008
Not much is being said right now about the Tax Free Savings Account (TFSA) but that will soon be changing. With a roll out date of Jan 1, 2009, the media is sure to be inundated this year with TFSAs. And with good reason.
This program stands to be one of the most significant savings and retirement planning devices available to you.
It is not income dependent but rather available to all Canadian residents at the same $5000 per year limit.
Once funds are in the account the amount put there plus all compounding and growth is forever tax free.
Let me say that again…. the amounts in there are forever tax free!!!
I would predict this program will fall right behind RSP’s for most persons and in some cases will be far more beneficial. There is a handy calculator at http://www.budget.gc.ca/2008/mm/calc_e.html that lets you test the model.
We are expecting roll out shortly of this program and Research Capital can offer this program to you within the next few months.
The stock alternative can make a lot of sense, in particular any large gains will result in a higher account value for tax free growth, unlike an RSP which only provides a deferral.
As a CFP, I am very pleased to see this added to the ways we can get your financial planning goals met.
