Looking into TFSA Benefits, TFSA allows you to set money aside in eligible investments and watch those savings grow tax-free throughout your lifetime. Interest, dividends, and capital gains earned in a TFSA are tax-free for life. Your TFSA savings can be withdrawn from your account at any time, for any reason, and all withdrawals are tax-free.
What are the benefits of a TFSA?
A TFSA allows you to set money aside in eligible investments and watch those savings grow tax-free throughout your lifetime. Interest, dividends, and capital gains earned in a TFSA are tax-free for life. Your TFSA savings can be withdrawn from your account at any time, for any reason1, and all withdrawals are tax-free. And if you want, you can put back the amount you withdraw into your TFSA. However, you have to do it the following year so it will not impact your contribution room.
How will a TFSA work for me?
There’s something for everyone with a TFSA and your Scotia advisor can help you decide how this registered account can help you meet your goals. Here are some ways that you can take advantage of this new savings vehicle:
Are you looking to save for a “rainy day”?
A TFSA is an ideal all-purpose savings account that offers complete flexibility to save for a multitude of uses in one registered account. Your savings build up over time – tax-free – helping you reach your goals sooner, and you can withdraw your money when you need it.
Do you have non-registered investments? Have you maximized your RRSP?
A TFSA is an excellent choice if you have non-registered investments. The TFSA allows you to turn taxable income into tax-free income for life, by creating a more tax-efficient investment portfolio and enabling you to maximize your investment growth. You can contribute to a TFSA for a spouse or other family member. Spousal attribution rules don’t apply as they would with an RRSP.
Are you retired or earning a pension income??
A TFSA is also an ideal investment vehicle for depositing surplus RIF or pension income. It provides the ability to permanently tax-shelter non-registered GIC interest income. Deposits to a TFSA will not result in a claw back of government benefits like Old Age Security or the Guaranteed Income Supplement and there is no age threshold at which a TFSA must convert into a taxable account.