$6500 for 2023's TFSA contribution
November? Really? Man this year has gone fast. And with that, it's hard to believe that we are already talking about next year's contribution room for Tax Free Savings Accounts (TFSA). Because of inflation, the amount has been announced at $6500 starting January 1, 2023.
So if you've never contributed to a TFSA before, as of today's date you can contribute $81500 and as of January 1, 2023 you can contribute $88000.
TFSAs are a great compliment to your retirement savings. All funds contributed and all the growth earned in the TFSA are not taxable when redemptions are done from these accounts. You can also re-contribute the amounts you take out of these accounts in the next calendar year. As your advisor, I keep track of these contributions and withdrawals to ensure that you do not overcontribute at any point in time.
TFSA accounts are like shoe boxes and you can invest those funds into any type of investment inside the TFSA 'shoe box' or account. GICs, mutual funds, segregated funds, market-linked GICs, stocks, bonds and others can all be invested in TFSAs. Each investment choice depends on your risk tolerance and what kind of access you require to those funds. You should speak with a financial advisor if you are unsure of waha to invest in inside your TFSA account.
Also, having multiple TFSA accounts in various institutions can cause confusion with how much you've contributed and how much more you can contribute. Consolidating those TFSA accounts may be in your best interest. As an aside, I can hold many of the bank mutual funds under my advisor code if you are interested in consolidating your accounts. Banks tend to charge transfer fees when moving funds from them but by moving mutual fund accounts as they are to me, no transfer fee is incurred.
TFSAs can also be a great way to save for short term savings as well including for renovations, vacations and more. Talk to me if you'd like to maximize this financial vehicle. I am happy to help.