Tax-Free Savings Account (TFSA)

Have you heard about the new Tax-Free Savings Account (TFSA)? As of January, all you can open a TFSA and avoid paying taxes on any revenues earned.

You can squirrel away up to $5,000 a year, an amount which will be adjusted to the cost of living next year. While you can withdraw funds freely from your account, and are not obliged to put them back at any time, don’t be mistaken. This is not a better version of your RRSP account.

In fact, your contributions to an RRSP lower your taxable income. Your contributions to a TFSA do not. So who can benefit from a TFSA? All those who have the ability to save money, once they have invested in their RRSP.