In this issue:
- CRA confirms TFSA limit for 2018
- TFSA or RRSP? Try these five tests
- The Wealthy Barber explains: TFSA or RRSP?
The TFSA contribution limit for 2018 will remain $5,500.
The indexation adjustment for personal income tax and benefit amounts is 1.5% for 2018, which is not enough to raise the TFSA limit to the next $500 increment.
In 2017, the Consumer Price Index has fallen from 2.1% in January to 1.4% in October, reaching a low of 1% in June.
With the TFSA limit at $5,500 for 2018, the total room available in 2018 for someone who has never contributed and has been eligible for the TFSA since its introduction in 2009 is $57,500.
There is a lot of confusion over whether it’s better to use an RRSP or tax-free savings account (TFSA) to save. Unfortunately, there is no easy answer. There are several variables to consider.
To simplify matters, I’ve created five tests that you can apply to help you make up your mind. Here they are, with some background on each.
Remember when life was simple? You needed to save and invest for retirement, so you opened an RRSP and contributed as much as you could each year.
Sure, the saving part was tough. And, of course, investing always had its challenges. But at least we all knew that an RRSP was the way to go.
Everybody said so. The woman on TV. Your advisor. The Wealthy Barber guy. Even your know-nothin’ cousin.
Then in 2009, along came the TFSA – totally fantastic savings account (or tax-free savings account).
Hmm. Suddenly, a second option to house our retirement dollars. What to do?
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