A: The idea behind TFSAs is to make the benefits of tax-free savings available to as many Canadians as possible. For that reason, TFSAs are available to every Canadian resident who is 18 years of age or older and has a Social Insurance Number (SIN).
However, at TD, you must have achieved age of majority in order to open a TFSA. So, if you live in British Columbia, Newfoundland and Labrador, Nova Scotia or New Brunswick, then you can’t actually open a TFSA until you are 19, which is the age of majority in those provinces. However, you will accumulate contribution room from the time you are 18.
A: An RSP is designed specifically to provide you with income after you retire. Your contribution limit is based on your income and the contributions you make are tax-deductible, but you do pay tax on the money when you receive it as income.
A TFSA is not designed specifically for retirement, but to help you save money for a wide range of goals. The amount you can contribute is not based on your income and your contributions are not tax-deductible. You can withdraw your money any time you want it, and you don’t pay tax on those withdrawals. You also don’t lose contribution room when you make a withdrawal – you can recontribute that amount to your TFSA the following year or any year after that.
A:
The TFSA contribution limit for 2016 is $5,5001. You can also carry forward any unused contribution room from previous years. The annual contribution limit was $5,000 from 2009 to 2012, $5,500 from 2013 to 2014 and $10,000 for 2015.
1Annual TFSA contribution limit is subject to change by the federal government.
A: You can carry forward any uncontributed amounts into future years indefinitely.
So for 2016, you can contribute up to $5,500 (annual contribution limit for 20161) PLUS any unused contribution room from previous years (The annual contribution limit was $5,000 from 2009 to 2012, $5,500 from 2013 to 2014 and $10,000 for 2015.).
1Annual TFSA contribution limit is subject to change by the federal government.
A: No, you never lose your contribution room – in fact, you can recontribute amounts you have withdrawn. You have to wait until the next year to recontribute, but you can carry forward the recontribution room indefinitely.
For example, say you contributed $5,5001 to your TFSA in January 2013 and another $5,500 in January 2014. Then, in the summer of 2014, you withdrew $3,000 to pay for some repairs to your home. You couldn't recontribute that $3,000 in 2014, but in 2015 it was added to your contribution room again.
1 Annual contribution limit for 2016 is $5,500. Annual contribution limit from 2009 to 2012 was $5,000. Annual contribution limit from 2013 to 2014 was $5,500. Annual contribution limit for 2015 was $10,000. Annual TFSA contribution limit is subject to change by the federal government. Excess contributions to a TFSA will be subject to a penalty tax of 1% per month based on the highest excess TFSA amount in that month. The penalty will be calculated on a monthly basis until the excess amount is withdrawn.