# What is your TFSA goal ?



## sags (May 15, 2010)

Different people...........different goals.

1) Build the TFSA as the main provider of retirement income in the future.

2) Build the TFSA as a secondary provider of retirement income........to fund extra things in retirement.

3) Build the TFSA to save for a home down payment, new car purchase, or other purchases as they come along.

4) Build the TFSA to provide education funding.

5) Leave an inheritance.

The vast majority of people are using number 3. What is your number ?

Edit.......hopefully responses will provide some insight and options for people asking "what should I do with my TFSA" ?


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## My Own Advisor (Sep 24, 2012)

1. and 2. are for me Sags. 

I've always seen the benefits of the TFSA since it was launched as a passive income retirement account and still do. I hope to max this puppy out every year for as long as I possibly can!


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## mind_business (Sep 24, 2011)

If this was available when I was younger, it would likely have been a combination between 2 & 3. Now at 49 it's solely focused on 2.


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## 1980z28 (Mar 4, 2010)

I am using as a place to max out,will not use it until way after retirement,it is where the extra goes


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## Ag Driver (Dec 13, 2012)

Intially was #3 to save up for my down payment on my house.

Now it is #1 and #2 savings for retirement.


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## Woz (Sep 5, 2013)

#2 for me.

I don't really plan to ever withdraw the money. It's more there as a tax free inheritance for my kids.


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## uptoolate (Oct 9, 2011)

For DW and I it is number 2 or really number 4b. (I would say that 4 should really be 4 and 5). For the kids it is number 3 but eventually number 2.


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## newfoundlander61 (Feb 6, 2011)

#2 for me. Currently receiving a DBPP from my time in the Army. Currently working, age 53. Plan on working until age 60. Will retire at 60 as pension is indexed at that time. Goal is to have 100K in my TFSA by then to draw on as needed for other things. Current TFSA value is $34k, in the Mawer Balanced Fund. Plan to max out TFSA yearly until age 60. I will most likely hit the 100k with no issues.


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## GoLong (Feb 21, 2015)

#1 and #2.

I'm young (20s) so if all goes according to plan I'll be able to have a VERY nice sum put away in this puppy.


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## sags (May 15, 2010)

uptoolate said:


> For DW and I it is number 2 or really number 4b. (I would say that 4 should really be 4 and 5). For the kids it is number 3 but eventually number 2.


Separated 4 and 5.


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## Jagas (Feb 11, 2013)

4, 2, 5


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## none (Jan 15, 2013)

Mine is (2) & (3) if there is a substantial market correction and owning a house becomes cheaper or on par with renting. Not much point owning a house otherwise.


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## Moneytoo (Mar 26, 2014)

Initially (and still partially) 3) and 4), but now that we've learned more and accumulated enough in a regular savings account, 2) and/or 5)

Maybe will become 1) later, but right now we just have more in RRSPs than TFSAs


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## Beaver101 (Nov 14, 2011)

#6. None of the above or use TFSA's to pay more taxes, rising hydro rates, rising property taxes, rising wages for public services, etc.


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## GreatLaker (Mar 23, 2014)

2 - RRSP and non-reg savings will provide my main retirement income with TFSA as backup.

Maybe #3 or 5 depending on rates of return of my portfolio, and what turns life throws at me.


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## heyjude (May 16, 2009)

2 and 3.


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## IFITSTOBEITSUP2ME (Mar 6, 2015)

None of the above specifically. Intend to put as much in the TFSA as possible that I currently direct trade, so that when eligible for OAS and "if", worse case scenario, we run out of other retirement investments GIS, it doesn't affect them being Tax Free investments, if needed to supplement. If not then the youngest will inherit. Psychologically my personality is such that I need a back up plan "just in case". Envy those that don't worry about running out of money before air.

Loved the fact that the amount has increased to almost double, personally for us I think the TFSA is the best thing since sliced bread and sure hope it continues in it's current format on tax free no limitation withdrawals or replacements for decades, but that's likely wishful thinking when they see how much some folks are making returns and the government doesn't get a slice of that pie.


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## AltaRed (Jun 8, 2009)

Probably 5. I cannot foresee needing to dip into TFSA assets at this point in my life. Hence I am shifting maturing GICs from the initial TFSA days into (relatively) safe income producing investments such as strong balance sheet REITs. May ultimately add some blue chip (low volatility) equities if government allows enough years of contribution room to get big enough.


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## Taraz (Nov 24, 2013)

The TFSA is to build an inheritance for the kid (or possibly kids - we'll see). I guess if everything else goes to hell in a handbasket then I could use it for retirement, but I don't expect it will come to that.


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## Synergy (Mar 18, 2013)

#2 and / or #5


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## janus10 (Nov 7, 2013)

sags said:


> Different people...........different goals.
> 
> 1) Build the TFSA as the main provider of retirement income in the future.
> 
> ...


Where is it qualified that the vast majority use number 3? It wouldn't surprise me to learn that many people use the TFSA "To Save For Alot" of things without a specific goal in mind. They have heard the marketing pitches about TFSAs and put money in there to avoid taxes, plain and simple.

My goal is to use another vehicle available to me to invest tax efficiently and will eventually hold the majority of interest income investments once retired. So, it is very much an integrated goal rather than something independent.


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## Cal (Jun 17, 2009)

Part of the compounding dividend machine I am assembling.....:biggrin:


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## fraser (May 15, 2010)

My goal is to maximize the amount of money that I can tax shelter in my TFSA and maximize the returns that I get inside that vehicle. I tend to place equities with good capital gains potential outside of my RSP and my TFSA since they only attract tax at half rates and save the RSP and TFSA for returns that would otherwise attract a higher rate of taxation. I do not have much RSP room because of my DB pension.


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## avrex (Nov 14, 2010)

As others have alluded to, the TFSAs use is very *dependent on your age.*

Since, I'm older now, I'll probably use it for 2. 


sags said:


> 2) Build the TFSA as a secondary provider of retirement income........to fund extra things in retirement.


Older people like me, will use their *RRSP* as their *main source* of retirement income.
Since, we won't be able to contribute as much to the TFSA (as our younger coherts), the *TFSA* will be a *secondary source* of retirement income.

F**k, I wish the TFSA was around when I was younger.


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## sags (May 15, 2010)

Given the statistics provided by the Government, it appears that those who make maximum contributions are older Canadians earning less than $60,000 in "income".

It looks like a transfer of already built up assets in an RRSP to a TFSA.

That would support what I have heard financial advisors say they are advising their clients to do..........to smooth out taxes now and let the money build tax free in the future.

The TFSA doesn't appear to be inducing more savings............more of a transfer of savings.


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## CalgaryPotato (Mar 7, 2015)

sags said:


> Given the statistics provided by the Government, it appears that those who make maximum contributions are older Canadians earning less than $60,000 in "income".
> 
> It looks like a transfer of already built up assets in an RRSP to a TFSA.
> 
> ...


I find that interesting, it seems contradictory to the numbers showing that it's mostly cash/GICs which makes it seem like people are using it as a shorter term savings vehicle.


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## AltaRed (Jun 8, 2009)

CalgaryPotato said:


> I find that interesting, it seems contradictory to the numbers showing that it's mostly cash/GICs which makes it seem like people are using it as a shorter term savings vehicle.


I think that is what is mostly being peddled by peoples' bankers/financial institutions for that demographic. Most older people in that income range don't venture beyond the tried and true and reliable.


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## sags (May 15, 2010)

You're right it does.........unless they have their RRSP full of GICs.


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## Itchy54 (Feb 12, 2012)

Sags, you said exactly what I am planning to do. Before cpp and oas kick in I will be slowly drawing out my rrsps and tucking them into TFSA accounts. I only work pat time now so it is an opportune time, before hubby retires with his pension, to put this plan into action. I only hope the level stays at 10,000. 

As my dad's POA I saw, when I did his taxes, how his rrif accounts are causing him to be clawed back on his OAS (with my mom gone there is no pension splitting). He pays a lot of tax....


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## sags (May 15, 2010)

Glad you pitched in Itchy54.

Your scenario shows that benefits from the TFSA do extend beyond the wealthy, although they do benefit the most.

But then, people with lots of money always benefit the most from everything financially oriented.


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## Westerncanada (Nov 11, 2013)

Assuming they do not have a Cap on it.. my main goal is going to be #1. 

I think this is a fantastic vehicle given the new maximum of $10,000 per year.. to be fair, I have not in the past saved this much for retirement on a yearly basis but feel this is a great goal for everyone and would play an important part in funding a very active/healthy retirement. 


My Retirement Income Stream in Order of Importance: 

1.) TFSA - Portfolio Income
2.) RRSP - Use as required
3.) Company Pension 
4.) Company Stock Plan
5.) CPP
6.) OAS
7.) Savings, Fixed Assets. 


Here is to hoping they do not cap the TFSA and reward savers with this type of a nest egg!


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## gaspr (Mar 24, 2014)

Westerncanada said:


> Here is to hoping they do not cap the TFSA and reward savers with this type of a nest egg!


By removing indexing, they almost have put a cap on future contributions. Assuming 3% inflation going forward, the "real" contribution limit 20 years from now will be less than $5500 in today's dollars...and will continue to drop from then on assuming no changes in inflation or government policy.


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## mrPPincer (Nov 21, 2011)

gaspr said:


> By removing indexing, they almost have put a cap on future contributions. Assuming 3% inflation going forward, the "real" contribution limit 20 years from now will be less than $5500 in today's dollars...and will continue to drop from then on assuming no changes in inflation or government policy.


Excellent observation gaspr!
This is what finance minister Joe Oliver could have said instead of the gaffe he made when he said it's Harper's grandchildren's problem. That blunder will cost them methinks, but I guess Trudeau's off-the-cuff comment that he will rescind the TFSA increase is a blunder at least as bad.
I'm left not sure who to vote for atm.


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## none (Jan 15, 2013)

mrPPincer said:


> Excellent observation gaspr!
> This is what finance minister Joe Oliver could have said instead of the gaffe he made when he said it's Harper's grandchildren's problem. That blunder will cost them methinks, but I guess Trudeau's off-the-cuff comment that he will rescind the TFSA increase is a blunder at least as bad.
> I'm left not sure who to vote for atm.


I think you're right about the Trudeau gaff. Not giving something and taking it away are VERY different things.


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## Westerncanada (Nov 11, 2013)

none said:


> I think you're right about the Trudeau gaff. Not giving something and taking it away are VERY different things.



I think not commenting on the TFSA changes would have been better then opposing it and saying you'll remove it. 

I am certain the over half of Canadians that have a TFSA will be less then supportive now.


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## none (Jan 15, 2013)

People (not just Canadians) also very heavily discount the future. Many people applaud it now b/c it helps them and doesn't sting too much but as more and more people use them correctly and abuse the loopholes (filling up family members TFSAs) then it's going to hurt the tax base. Then again, perhaps Harpers grand daughter will just raise the GST by 5%. Done.

I still think the winner would be combining TFSAs and RRSP amounts. I.e 20K per year of real tax sheltered money. For example, someone in a 30% bracket could get 10K TFSA and 13K RRSP room or something like that. To me, that would level the playing field, give people choice, and be flexible for people life styles.

The RRSP program was designed to reduce poverty in retirement and it's been hugely successful in meeting that policy objective. It would be a shame if such a great program got erased b/c of TFSAs.


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