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So for the 40% of Canadians who have withdrawn from their RRSPs (on average, 3 times) this could be a great alternative.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.)