5/05/2014

Do you have a TSFA?

Posted by with 3 comments | in ,
My Money, My Choices - Level 3, Activity 9 & 10

From the blog posts, and articles that you still see regularly around the merits of TSFA's versus RRSP - it's no wonder people are still confused about what they are for, and if they should have one.

Level 3 activity 9 and 10 are to open a TSFA and automate contributions to it.  It's the easiest (only?) way in Canada to save money (up to $5,000/year) and not pay taxes on the gains earned on the money.  For a lot of people who are lower income, it makes sense to save for retirement this way; Jordan and however need to use RRSPs for retirement to capitalize on deferring the taxes payable until we're in lower tax brackets in retirement.

We use my TSFA to save for eventually a baby.  We currently have $3,300ish and the goal is $10,000 to help offset maternity/parental leave no income. We save $100 every month to the fund, to grow it slowly but surely.  I see this account as I see our retirement accounts - it cannot be touched unless it's for the very specific reasons we've laid out (I'm so much more flexible with our Emergency/Curveball accounts which is perhaps why we've never achieved a particularly high goal for the Efund).

What do you use your TSFA for?

Related Posts:

  • My Money, My Choices - Level 3, Activity 4The fourth activity in level 3 is getting set up on a company pension plan if you're not already on one - thankfully I am but unfortunately, Jordan's company doesn't have one. Mine is a defined contribution (not defined be… Read More
  • My Money, My Choices - Level 3, Activity 1This activity takes us through calculating our personal savings rate.  Gail tells us that there is basically two different types of savings. Long Term - Retirement Planned Spending - Emergencies, Kids School Funds, Vaca… Read More
  • My Money, My Choices - Level 3, Activity 3 A couple days ago, I wrote about creating the Emergency Fund, today is about automating it.  This one is really simple - just set up an automatic savings programme.  With a goal of $25,000 it's going to take us a … Read More
  • My Money, My Choices - Level 3, Activity 2This activity is to set up an Emergency Fund...which Jordan and I have...but is it being used properly?  This is what Gail says an emergency fund is for: Needing new tires is not an emergency. Nor is a new roof, that re… Read More
  • My Money, My Choices - Level 3, Activity 5 & 6In this activity we set up our retirement savings..and automate them (activity 6) I think it's really apt on the tail of yesterday's post about my grandmother in retirement and the post we did about a week ago or so on Level … Read More

3 comments:

  1. Morgaine5 May 2014 at 11:46

    I have a TFSA and currently its my emergency fund. I'm putting just over $300 per month in there to hopefully have $2500 in there by the end of the year. Once my EF is fully funded (I'm thinking $5K for mid-term goal then $10K eventually) I would like to diversify and buy index funds/ETFs/stocks in my TFSA and my RSP. Since I have a company pension, I want to focus on using my TFSA more than my RSP but I have to repay the first time homebuyer's plan first and build up these accounts over time. You guys are doing great with your savings. Keep up the good work!

    ReplyDelete
  2. Newbie8 May 2014 at 20:56

    Actually, it's more than 5K/year.

    The annual contribution limit for the TFSA was $5,000 for 2009 - 2012. It was increased to $5,500 effective January 2013.

    ReplyDelete
    Replies
    1. Jessie's Money9 May 2014 at 07:10

      Yes! You're right, thanks for reminding me.

      Delete

Hi! Thank you for stopping by and leaving a message.

Subscribe to: Post Comments (Atom)

Links ♥

Followers