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No matter what you are saving for, a Tax Free Savings Account (TFSA) is a great way to save, be it a long-term goal such as retirement or a short term goal such as a renovation or a vacation!

If you have never opened a TFSA and have been eligible for the TFSA since it’s inception in 2009, you can contribute $75,500 today. TFSAs are a unique way for Canadians to save money and pay less tax. Anyone 18 or older and who has a valid social insurance number can open a TFSA and save up to $6,000 every year.

Here are the dollar amounts by year:

For 2009, 2010, 2011 and 2012 $5,000
For 2013 and 2014 $5,500
For 2015 $10,000
For 2016, 2017 and 2018 $5,500
For 2019, 2020, 2021 $6,000

The CRA just released the new TFSA limits for 2022, which will stay the same as it has been since 2019 – $6,000 and will take the total contribution limit to $81,500.

 

Did you know?

  • You can hold many types of investments in your TFSA including but not limited to mutual funds, ETFs, GICs, bonds, and securities.
  • You can withdraw money any time and investment income is not taxed.
  • Contributions are not deductible from your taxable income.
  • Unused contribution limits can be carried forward indefinitely to future years. If you didn’t contribute the maximum amount in a given year, you are allowed to “catch up” in the future as long as you stay within the overall contribution room limits.
  • Any withdrawals from your TFSA are added to your contribution room in the following year, so you can recontribute it in a different year.
  • You can have more than one TFSA but keep a watchful eye so that you don’t go over the contribution limits
  • If you contribute more than the total allowed, the over-contribution amount will be subject to a tax penalty
  • You can check your TFSA limits by going to the CRA website and logging in to My CRA Account