10 TFSA Tips
G. KONRAD CFP, Financial Consultant
introduction of the Tax-Free Savings Account (TFSA), Canadians
now have more options than ever before to help them save money
and reduce taxes. Below are the Top 10 TFSA Tips you should
your tax-refund wisely. Use the tax refund from your RRSP
contributions to invest in your TFSA for an optimal combination
of growth and flexibility.
you have used-up all of your RRSP contribution room and are
looking for additional investments, ensure you use-up all
of your TFSA contribution room prior to investing in non-registered
the temptation to dip into your TFSA. The TFSA offers more
flexibility than RRSPs and therefore there are fewer barriers
to discourage an individual from accessing the money. Remember,
the longer your investments sit uninterrupted, the longer
you may benefit from the positive effects of tax-free compound
growth. Discipline and a clear objective are essential when
investing within a TFSA.
can be costly, so make your TFSA contribution early in the
year. The sooner you put your money into a TFSA, the sooner
you stand to benefit from the effects of tax-free compound
growth. If you cant do it all in January, monthly contributions
can also be effective.
you should use your full allowable contribution room each
year. But if you dont, you will accumulate unused TFSA
contribution room that can be used at a later date. When possible
and if it fits your financial strategy, strive to maximize
your TFSA contributions.
in a TFSA during your accumulation years could help reduce
claw-backs on income-tested benefits such as Old-Age Security
and Age Credits when it comes time to withdraw retirement
funds. Because returns on investment within a TFSA are non-taxable,
they will not be included as part of your net income, potentially
saving you money over time.
RRSPs, there is no age limit on making contributions to a
TFSA. In fact, you can contribute well into your retirement
years, helping you save for shortterm goals like that dream
vacation, a new car or even home renovations. The income generated
from investments in your TFSA is tax-free, therefore it will
not affect your federal income-tested benefits such as OAS
or Age Credits.
you anticipate that your marginal tax rate will increase at
a later date, you may benefit by saving through your TFSA
rather than making additional RRSP contributions. Thats
because the tax reduction that your RRSP
contribution may generate now may be less than the tax reduction
it could generate later on.
a contribution for your spouse or common-law partner. You
can contribute to a partners TFSA without affecting
your own contribution room. Income attribution rules which
govern RRSPs do not apply. This can effectively double your
familys TFSA annual contributions if one partner cannot
afford to make such an investment.
expert help. In most cases, the TFSA is an investment vehicle
that should compliment your current retirement strategy, not
be the primary focus. To find out whats the best strategy
for you contact an Investors Group Consultant.
G. KONRAD CFP
(204) 489-4640 ext. 246
100-1345 WAVERLEY STREET
WINNIPEG, MB R3T 5Y6
(204) 489-4640 ext. 267
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more in the May
24-Jun 20/2010 issue of Senior Scope)
William J. Thomas
- the master of senior moments
a friend of mine. Soldier, lawyer, innkeeper, sailor and now
golfer Fred just turned 87 years of age. He winters
in Florida at Boca Raton, summers in Port Maitland along the
north shore of Lake Erie and in between leaves people in both
countries shaking their heads and laughing.
soft spoken, well read, quick to smile and sends me invitations
to Happy Hour at his Pinkys Bar that end with the caveat,
Should you choose to decline, further action will be
taken. I did mention he was once a lawyer. Like many
men who become young boys again once they retire, Fred requires
constant adult supervision. That would be Bert, Freds
a Captain in the Royal Canadian Air Force, a pilot who flew
the Lancaster Bomber during WWII. The roar of the four Rolls
Royce engines as well as too many night runs over German munitions
factories and weapons depots all but destroyed his hearing.
summers ago I took Fred to an air show in Dunnville where
they trained Allied pilots during the war. I approached a
pilot flying a Tiger Moth, the same small plane Fred had taken
his basics on. I told him about Fred and he told me hed
be honored to take him up for a spin.
he gracefully declined the invitation saying it would be an
inconvience and he wasnt dressed for it plus there was
the matter of insurance, Fred finally turned and whispered
in my ear: Im afraid of heights, okay.
Fred got up very early to golf with Berts son on Floridas
Sanibel Island. Fred and Bert had just arrived at Scotts
house the evening before and he was rooting though their luggage
in the dark trying to get dressed without waking up his wife.
Bert of course was awake and listening to all the commotion.
When Fred was finally dressed and ready to go, he opened the
bedroom door and enough light came in to allow Bert to see
wearing my pants.
silver buckle on the back of the khaki Capri pants was a bit
of a giveaway. Its almost too bad Bert caught the wardrobe
malfunction because Fred, in a pair of womens pants
would have so unnerved the other golfers, hed likely
have won the match.
remember if this happened before or after the day Fred took
a mighty fairway swing, missed the shot and returned home
covered in black muck from the pond he fell into. It must
have been after because before that Fred got all banged up
after he fell out of a golf cart when he failed to hear the
driver start it up.
back on their patio in Boca Raton enjoying a late afternoon
drink with Bailey, their three-year-old Maltese poodle mix
at their feet, Fred noticed a big, ugly raccoon climbing the
fence which separates their property and the golf course where
he volunteers part-time as a starter. Fred thought it strange
that the raccoon was roaming around in daylight, but the animal
climbed behind their brick pool house and disappeared.
it was there, running toward them and mauling the little dog.
As fur flew and blood splattered, Bert and Fred became locked
in a tug-of-war trying to extract the dog from the clutches
of the raccoon. Bert ended up with a bleeding dog in her arms
and Fred, sensing the raccoon was mad with disease and far
from spent wrestled the animal into the pool. From the shallow
end he managed to drag the animal to the deep end where, in
hand-to-claw battle worthy of an episode of Sea Hunt, he drowned
the vicious raccoon. War vet 1, rabid raccoon 0. Fred received
half his rabbis treatments while in Florida, half when he
returned to Canada that spring.
I will probably never find ourselves in an underwater death
roll with a crazed raccoon but
these things happen
to his buddy Dr. Dave Hurst, Fred received a set of hearing
aids paid for by Veteran Affairs here in Canada. They malfunctioned
during his winter in Florida so he mailed them back to Canada
for repair. Weeks passed, Christmas came and Fred got a notice
from the local U.S. post office, located in a nearby pharmacy,
that a package from Canada awaited him. Any postal package
coming from another country carries a customs label and raises
questions. The very large, female postmaster holding Freds
package in her hand, had just one question.
in the box?
hear the question, so he asked her to repeat the question.
There were quite a few people in line behind him.
in the box? She was practically yelling now.
Fred again did not hear the question and now he noticed about
20 people in that corner of the store were focused on this
loud exchange with the postmaster.
in the box? screamed the woman that turned heads in
all corners of the store.
said Fred, these are my hearing aids. Im really
lost without them.
employee broke up, the crowd laughed long and hard and then
in the spirit of the season Bert says, they all began clapping
Fred, a walking, talking, not-hearing-too-well Kodak moment.
the old I Love Lucy show? Yeah, well almost everyday Fred
comes home, hes got lossa splainin to do. And
yes, Berts new nickname is Ricky.
J. Thomas lives in Wainfleet, Ont.
For comments, ideas and copies of The True Story of Wainfleet
go to www.williamthomas.ca
more in the May
24-Jun 20/2010 issue of Senior Scope)