TFSA Accounts | Tax Free Savings Accounts | Discussion forum

abstech17 said

How much does a bank charge for TFSA Accounts

Bank, credit union or online brokerage usually no charges to invest. But ask before you invest.
Some "may" charge:
To close account
To withdraw
To transfer to another institution

https://www.highinterestsavings.ca/forum/tax-free-savings-accounts/potential-tfsa-limit-increase-to-10000-in-2015/

The CRA has announced that the annual TFSA contribution limit for 2015 will be $5,500. This makes the total possible contribution room since introduction a sizeable $36,500.
http://www.miiockm.com/2014/11.....-5500.html

Don't forget there is an election next year. Timing is everything. If you want the 10G limit, you have to vote Conservative. Whole thing about the TFSA is that it is a vehicle mostly for the rich, like the biggest beneficiaries of income splitting. The average middle class family with 2.5 kids and 2 incomes with a mortgage and credit card debt can't afford to max out their TFSAs, RSP, emergency fund, etc. We're DINKs now and we couldn't afford 20K a year to sock away in a TFSA.

Rick said

Don't forget there is an election next year. Timing is everything. If you want the 10G limit, you have to vote Conservative. Whole thing about the TFSA is that it is a vehicle mostly for the rich, like the biggest beneficiaries of income splitting. The average middle class family with 2.5 kids and 2 incomes with a mortgage and credit card debt can't afford to max out their TFSAs, RSP, emergency fund, etc. We're DINKs now and we couldn't afford 20K a year to sock away in a TFSA.

This confirms what you are saying.
http://www.moneysense.ca/save/.....tion-limit

Rick said

kanaka said

Rick for most of my working days I was a SI3K. For retirees from a middle income the 10000 TFSA is most welcome as it allows to reallocate RRSP funds to TFSA. No matter what, I will be hit with at least 20% income tax on a RRIF or RRSP withdrawal. And by putting it in TFSA it will continue to grow tax free. At this point in my retired life I don't need the RRSP funds. Hopefully my program will show me in a very low income bracket in the next 10-15 years.

True enough Kanaka. My long term goal is to deplete my RSP's and convert them to TFSA's while trying to stay under the Minimums tax bracket when I retire in 2019.

Exactly!!! I only wished that I had clued in a few years earlier vs when I started. Keep in mind any other things you have invested in that might not allow you to reallocate every year. Like a Life Insurance endowment policy that pays you out at age 65 (taxable) or any pay outs of retiree benefits from your employer.

Loonie said

I am not aware of life insurance payouts being taxable. Mine aren't, anyway. It all depends, I think, on whether you paid tax before you put it into life insurance. If not, you will probably pay at the end.
.

I bought an endowment policy from Metrpolitan Life when I was 16 from the insurance guy that came door to door to collect monthly insurance premiums from my father. The old days!!!!! It was 5000 plus another 5000 if accidental death and so much per finger, arm, and leg etc. It cost me103 a year with a 12500 payout which looked real nice to me in1965! I had no idea there were different kinds of insurance and no idea it was taxable. I would receive dividends every year that would increase my insurance payout in the event of death which also reflected the payout. Metro Life was always a pain, calling me for visits to service my policy.....BS.....we all know that. But since the policy is now held by a third company I have a real good agent. Good agent, did I really say that? When I retired I paid out my premiums for the next 7 years and they give me interest on the funds held in the premium account, which I declare as income. I emailed the agent a year or so ago and she emailed me as of that date, what I would receive in non taxable and taxable amounts. When I am paid out I am told is, I will have a couple of options to take (like an insurance annuity, surprise, surprise) or cash. Sounds like there is no way to spread out the tax hit though. They will NOT withhold taxes I am told. I assume I will get a statement of the payout and also assume I will receive a T slip for 2015. I had checked online and find that Endowment policies are no longer offered as they lost popularity .... or from the insurance company's view, a product too good for the customer but not good for their bottom line...who knows! I also found that this type of insurance product is exempt from annual taxation as a result of the dividends paid; and the accumulated dividends are taxable at the date of maturity of the policy or at the time of early redemption. I assume no taxes if it was paid out upon death and payout to beneficiary. Good for retirees at a lower income as I will pay the lowest rate of income tax on it. The payout is not the 12500 as per the agents handwritten notes on the preprinted brochure....it is around 20000!!!! So what would 103 year for 55 years be, invested in a GIC or? at all the different rates and market ups and downs..what would it have yielded.....I don't know. But 20,000 minus taxes on the taxable amount for 5500 is nothing to sneeze at...is it?

Any one with an insurance policy pay out (to the policy holder) should verify a year or so before maturity of the policy to verify tax consequences, if any.

Thanks for the explanation. I think I'm glad they don't offer this any more.

At least you are getting something back! It's better than if you'd bought an encyclopedia at the front door! (note to younger members: expensive encyclopedias used to be sold door-to-door in the 1960s etc.)