Freebie Wednesday: why the new TaxFree Savings Account is KA for me and you!
Feb 27th, 2008 by nancyzimmerman
Sweet. This is something that could really work for a whole lot of us. And it came from the Harper Gov’t (*shakes head*).
Here’s the deal (and why I’m posting it as blowing all other Freebies out of the water today):
Each of us (of legal age) can save up to $5000 per year, and whatever money we make on it is tax free. You could put it in a savings account (yawn, but if you must, at least choose Citizens’ Bank’s Ultimate Savings account) but you could also buy stocks or mutual funds. (and I’ve doubled my money plenty of times within a couple years. If I did it, so can your average bear).
But the beauty is this. If you need it – say for an emergency, or traveling, or renovating the house – you can take it out hassle free, you don’t get dinged with tax, and then the room from the money you took out is freed up to replenish when you can.
So for the 40% of Canadians who have withdrawn from their RRSPs (on average, 3 times) this could be a great alternative. Save your RRSPs for Retirement. Use this TFSA as a place to save up, and use as needed.
Personally, I’m over the moon on this one. Begrudging respect to the conservatives on this one.
Shoot straight with me: think this incentive will encourage you to save more aggressively? Why/why not?
(ps: this all assumes the house doesn’t fall on March 5th.
pps: merci a jean-pierre pour le photo. et pardon ma francaise.)
Nancy, do you think this is something we’ll be able to shift money into online or will it be à la RRSP season where we meet with advisors, etc? I’m just hoping when the time comes I have the money to put in there!!!
It’s funny because when I heard this the first time, I was extremely happy, but talking about it to my friends and coworkers, most hadn’t even heard about it or just don’t give a d@mn!!
@canadiansaver – I would think it’s something we can do online. And it’s not going to be just savings – we can invest in stocks etc. I find it really inspiring, personally. I invest outside of my RRSP currently, so now I can do so and get a tax break when I’m successful in my investing (and not to brag, but, ummm, I usually am! – the point being, if i can do it, anyone can).
I’m glad you’re telling other people. I will, too. You may know, my ultimate (don quixote) vision is for canadians to be really savvy with money, getting ahead, and able to do stuff like buy organic/green, and help others (both locally and internationally) get on their feet. This tax savings initiative could be a tiny piece of that puzzle.
Enough of my soapbox