Manon Joubert | Desjardins Group
People generally have fewer financial commitments as they get closer to retirement; the kids have usually left home and the mortgage may be paid off. That means they can put more money into savings. And a TFSA is the perfect investment vehicle.
There are lots of good reasons to choose a TFSA:
- You can make withdrawals for short- or long-term goals, like buying a car, renovating your home or taking a trip.
- If you've maxed out your RRSP contributions.
- If you're already retired, a TFSA is the perfect investment vehicle because there's no age limit for contributing. And contribution room accumulates every year.
- Any money you withdraw can be reinvested in your TFSA, since you don't lose your contribution room.
- Income generated on investments is tax-sheltered and is not taxable, even when it's withdrawn.
- TFSA withdrawals are not included in income for income tax purposes, so they don't have an effect on income-based government benefits, like the Guaranteed Income Supplement for individuals with low incomes or the reduction of the Old Age Security pension for those with higher incomes.
To find out about all the advantages of TFSAs, watch this video with Angela Iermieri, a financial planner with Desjardins.