Corner Financial Partners
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Safeguarding your family’s financial future
How to keep your TFSA aligned with your goals
This year, you can contribute $6,000 to your Tax-Free Savings Account (TFSA), bringing the cumulative total of TFSA contributions to $63,500, or $127,000 between a couple. This means that a TFSA can help meet any investment objective.
Your first decision
You need to look at all components of your financial plan and decide where TFSA investments can help you the most.
Education. To meet today’s increasing education costs, a TFSA can boost savings from a Registered Education Savings Plan (RESP), and a couple with more than one child can dedicate both accounts to the goal.
Retirement. As a retirement savings vehicle, a TFSA builds an income source that’s tax-free and doesn’t affect eligibility for Old Age Security (OAS) benefits.
Estate planning. A TFSA has great flexibility for estate planning purposes – providing heirs with a tax-free inheritance, offsetting taxes payable by your estate or leaving a charitable gift and claiming the charitable donation tax credit.
Tax planning. As an income-splitting strategy, funds can be gifted to your spouse, children or grandchildren that they contribute to their own TFSAs.
Savings. A TFSA is always ideal when saving for a short-term purchase, as withdrawals are added to contribution room the following calendar year. And some people use a TFSA as an emergency fund.
Once the use is determined, we’ll recommend which investments suit your objective and risk tolerance.
Future steps
Your TFSA investments may change when your objective’s time horizon shortens. For example, a TFSA for education savings typically becomes more conservative as secondary school graduation approaches. And your investments may change greatly when your objective changes. That TFSA for education savings? When your child graduates from university, your TFSA may become a growth-oriented account for your retirement.
Contact us if you wish to discuss how your TFSA stays aligned with your evolving investment goals.
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