May 29th, 2008

The Honourable James M. Flaherty, P.C., M.P. Minister of Finance

Discusses Tax-Free Savings Account at Budget 2008—Responsible Leadership

This is how it works:

• First, Canadians can contribute up to $5,000 every year to a registered Tax-Free Savings Account, plus carry forward any unused room to future years;
• Second, the investment income, including capital gains, earned in the plan will be exempt from any tax, even when withdrawn;
• Third, Canadians can withdraw from the account at any time without restriction. Better yet, there are no restrictions on what they can save for; and
• Finally, the full amount of withdrawals may be re-contributed to their Tax-Free Savings Account in the future, to ensure no loss in a person’s total savings room.

An RRSP is primarily designed for retirement. In many ways, a Tax-Free Savings Account is like an RRSP for everything else in your life.

It is a powerful incentive to save:

• To help young people saving for their first car;
• To help couples saving for their first home;
• To help seniors stretch their retirement savings further; and
• To help every Canadian set aside a bit of cash each month for a special project, to help their kids, or to simply treat themselves.

To make it easier for lower- and modest-income Canadians to save, there will be no clawbacks. Neither the income or capital gains earned in a Tax-Free Savings Account nor the withdrawals from it will affect eligibility for federal income-tested benefits, such as the Guaranteed Income Supplement.

May 14th, 2008

Thinking about opening a TFSA account in 2009 and using it for retirement purposes?

Canadians now have more savings and retirement options than ever. Chances are that you already know about the Registered Retired Savings Plan (RRSP) and Registered Income Fund (RIF), Locked-In Retirement Account. We are also assuming that people already know about Bonds, GIC’s, and other long-term investment options.  In a market with competing and equally tempting investment vehicles it is not easy to make an investment decision for post retirement savings.  Following are some helpful tips which will make your savings choice easier.  http://taxfreesavingsaccountinfo.com/tax-free-savings-account-seniors/