4 Better Strategies For Your TFSA

TFSA, Calgary

The truth is, most Canadians still do not understand what a TFSA is, never mind, what to do with it.

A Tax Free Savings Account (TFSA) is an account that you can set up through most financial institutions in Canada. The government allows you to put "after tax" money into this type of account and to grow it on a "tax-free" basis. Within the account you may invest your money in Stocks, Mutual Funds, Segregated Funds, GIC's, ETF's, etc - basically, whatever is available at the institution you've opened the account with. If you receive a gain from your investment you DO NOT have to pay tax to the government on that gain.

It's really of no value to have a TFSA if you do not know what it is and what your investment options are. Most banks will just get you to open the account and let your money sit in it earning little or nothing at all. They then loan your money back to you, your family and friends at higher interest rates in the way of credit cards, mortgages and car loans. They do not want you to understand how it works because you wouldn't do it any longer.

Related article: Using the Bank's Money to Build Your Wealth

Here are 4 good strategies for your TFSA:

1.) Emergency Savings. Everyone should have 3-6 months saved up for an emergency. Loss of job, going home for a funeral, illness, furnace breakdown. Make sure your investment choices are both liquid (Easyily accessible) and invested in something that can earn at least 3%.

2.) Funeral Planning. This is a great way to save up 10 or 20 thousand dollars for your final expenses. This is especailly beneficial for someone who doesn't qualify for life insurance at a reasonable rate, because of age or health status. Final expenses may extend beyond the cost of a funeral and include such items as credit card balances, accounting fees, taxes, and other expenses associated with your estate.

3.) Retirement Planning. The TFSA is a great way to have some money kind of "hid away",  because it doesn't interfere with the calculation in determining "OAS Clawbacks". We also like to use it to transfer a client's RRIF payment in the case where they don't really need the money now, but want to save for any future Long Term care needs.

4.) Employer Stock Option Plan. Many employers offer various investment plans to their employees as a bonus or a way to encourage loyalty. If the TFSA is an option within your company I would jump on the opportunity. All that growth in the form of dividends, free money and stock growth will be yours to keep and grow on a tax-free basis. That's a big score for you.

To recap. A TFSA is not a bank account to be used to move money in and out monthly. It is of no value to you if it isn't growing - the tax on nothing is nothing. However, if used properly it is one of the best investment vehicles we have in Canada.

Let's plan your worry-free retirement:  To find out how, Call us at 587-755-0159 or complete the form below to get started.


How Do You Know You are Getting Your Full CPP and OAS Pensions? Join us for our Next Workshop on Jan. 4th, 2017

For more info and to register: click here




Willis & Nancy Langford


Everyone Needs and Deserves a Quality Retirement Income Plan


Share This Post:

Related Posts

Latest Testimonial

I contacted Langford Financial to see if they could help me with specific questions on retirement & estate planning, efficient tax strategies, CPP and OAS benefits, and income drawdown strategies. I was very nervous at first about whether they would be a good fit for my needs, but my concerns were quickly put to rest and Willis and his team made me feel at ease right from the very first meeting.

They are very easy to work with, are very knowledgeable and resourceful, are able to break down complex matters into an easy-to-understand manner, and are always quick to respond to any questions. They reviewed my situation and were able to tailor a plan to fit my specific needs, to my complete satisfaction.

The plan included amongst other things, the best way to utilize efficient income tax strategies. helped me to understand the correct drawdown of assets which would result in larger savings, and provided guidance on insurance products and efficient estate planning.

As a result, I have a much clearer picture of my financial situation now and feel very confident and satisfied with the plan that they have proposed for me, going forward. What I appreciated the most about Willis and his team was that, in addition to their friendly, personable and professional approach, at no time was there ever any pressure to purchase any products.

I am very happy with the service I received from Willis and his team and would recommend Langford Financial to anyone looking for advice on their retirement planning needs. You will not be disappointed!

Naila Jinnah

Naila Jinnah
Fee-Only Planning Client

Contact Us

Questions? Comments? Call us today at 587-755-0159 or fill out the form below:

Have Questions? Call Us Today At

Call Us

Join Our Newsletter