This was a very informative video on TFSA's. I already knew all this stuff but it's always refreshing to watch someone explain it the right way. I'm not always the best at putting things in words...... I'm a numbers guy and great with numbers but very poor with words.
But doing same in an RRSP has more wealth building power because you get to invest all of your earned income, not just what is "left over", so if you have to decide which way, choose RRSP then place your tax refund into the TFSA (as explained near the end of the video).
This is really interesting. In South Africa, you CANNOT carry over contributions you didn’t make below your annual limit. You also cannot replace contributions withdrawn. It will count against your annual/lifetime limits.
in less than 12 minutes, i learned more than these damn 3 hour livestreams and long videos ppl make just beating around the bush. i appreciate it man! i believe my current investment will grow significantly over the next 3 years and if my contribution room grows with my investment than thats perfect because i got some serious money coming within the next few years and i plan to dump as much i can right back into new investment that will hopefully ipo soon. im trying to solidify my future man and videos like these r such a huge help.
I'm finding it hard to find an answer to this question: if I invested into a bunch of stocks on Wealthsimple through my personal chequing account, can I then sell the stocks and withdraw to a TFSA? or are these investments locked to the account the money originated from? Does the investment have to originate from a TFSA to avoid the 50% capital gains tax?
It does have to originate in your TFSA. FYI, the capital gains tax isn't 50%. 50% of your capital gain is taxable. That amount gets added to your income and you end up paying whatever your marginal tax rate is.
Just how much trading is too much? I mean, I have bought sold some assets in favour of others as I learn more about what strategy I want to take. I am by no means a day trader. Does the CRA only investigate if you are buying and selling very frequently? I guess I'm just unsure about this because you should be able to protect your money by buying and selling. Why the limit? The money was taxed already. I feels strange to be potentially penalized with no clear reason or definition of how much is "too much". Any ideas? Great video BTW!
Adam, great video. I've been harping on my kids to make use of their TFSA. Coupled with a higher risk tolerance and a longer investment horizon because they are in their mid-20s, I believe it will do more than anything else to ensure their long term financial independence. For the old dogs like me, I think the TFSA is the BEST way to maximize my retirement income by using all my RIF before I turn 70 and then I can start using my TFSA, which does not count as income so it does not diminish my OAS payout. Unfortunately, sooner or later the government is going to figure out that WAY too much wealth is inaccessible to them in TFSAs and I expect they won't be around much longer... perhaps a decade, perhaps longer.
The whole structure of TFSA combined with RRSP is incredibly smart (main income bound investment + periodic hedge possibility via TFSA). I really feel pain when i see that not so many people taking advantage of it. If that structure will keep running for at least some time than Canadians will be far in front of Switzerland / Norway in terms of personal savings. Unfortunately it is not so clear for at least 90% of Canadians.
Interesting idea Jim re: the CRA latching onto the income coming out of our TFSAs. Hopefully that doesn't happen and they continue to be satisfied with their RRIF and non-registered tax grabs.
Great content as always. Another good reason to have a well funded TFSA as you approach retirement is that a lot of people end up retiring earlier than planned, often through something like a corporate downsizing. If you are in your late 50s and you get let go from work, that TFSA could be a life saver to cover expenses until you can find a new job (very hard at that stage of your career!) or until you can start drawing on other retirement income sources. No one wants to plan for an unexpected termination of employment just before you're ready to retire on your own terms, but it happens.
I have been watching your Videos with big likes ,,,But one of your past Videos regarding Canadian seniors living abroad was not really clear for me , I am 66 years old now living in Vancouver if i want to live in Vietnam How long can i live there in order to maintain my Cpp and old age security Benefits can i live there more than 6 months and show up in Vancouver to do my taxes and then Go back .I don't know what is the agreement Between government of Canada and Vietnam in regards to people in the same Boat like me I would appreciate if you could create another Video , thanks again keep up the good work ,
Nice, didn't know the growing contributions when you take it out one year, and you're able to contribute the full amount (initial contribution + profit) back the following year in addition to the new contribution limit. 🙂 Awesome, thank you!
Ah, I remember the very few people who did day trading in their TSFA when it was first launched and accumulated hundred of thousand of dollars..... then had to bargin with revenue Canada over taxes.
Thank you for the excellent video. Free advice from people like me is probably only worth what you pay but on crypto ETFs, all are not equal. In Canada there are ETFs that hold the actual asset, which is a much better solution (hedged or not to Canadian currency). In the US, the ETFs roll futures contracts, which involves significant risk. My experience tells me that the cost of the roll is going to be very onerous, mostly because there is only one side to the trade. As a result, the US ETF is likely to underperform Bitcoin and the Canadian ETF. Just sayin
Excellent video. I did exactly that, all RRSP refunds go into TFSA, mine is maxed and has crypto that pays dividends. And the other point I would make is all securities in TFSA are not DRIP eligible, which is great for me at 58, I want cash flow now
I loss my job, and had the pension company transferred cash to my RSP, why didn’t the bank send me a contribution slip? But they send me a RSPT4 for the RSP withdrawal but not a contribution slip, why is it not considered a contribution to my RSP ?
Hello Adam;I've just come across your channel and subscribed. I do have a TFSA but as you just said many of us including myself are probably using it wrong. I have mine with RBC since June '20 which which my father had set up for my brother and I. I've been experiencing some financial difficulties lately and I've had to borrow from my TFSA. Now from the little knowledge what I've learned so far is that you can't put funds back into this account until a year later. My question is can I open another TFSA and put the funds in there instead? I'd like to have a meeting with you sometime in the near future so that I can discuss strategies as to how to properly use a TFSA and also an RRSP.
I have a question, sorry if it's been asked, I didn't read all the comments: let's say your TFSA is maxed out and then it grows to 100 000$. You then pull out all the 100 000$ in November 2021. In January 2022 you now have 106 000$ contrubution room (assuming the 6000$ yearly hike). If you don't use any of that room in 2022, in 2023 you would now have 112 000$ (assuming the yearly is again 6000$). Am I getting that right?
So I put $50,000 in It grows to $70,000 IN MY TFSA I TAKE OUT $20,000 I'm not tax on the gain $20,000 WHATif I take the entire amount Am I taxed on the $50,000 And if so why
One way to also make great income from a TFSA is if your holding say a stock like Apple which has really good options premiums is selling cover calls on your Apple shares. I average about $300 a month in option premiums with a TFSA balance of $70,000. A lot better than dividends and no withholding taxes, pure tax free income. There is a bit of a learner curve to learning how to sell options but it’s worth it.
a-a-a-a-and... you automatically fall into category "professional income" where your TFSA becomes actually taxable. Issue Number 2: options is not free money. It is reward for the risk you agreed to transfer on yourself. That means one day you may not guess the future right (almost guaranteed) and you will loose a lot. so it is not even close to dividends in its definition.
Very helpful content, thanks! You mentioned that the 15% withholding tax applies on the dividends only. Does it mean that the tax won't apply to the capital gain/growth in stock price?
Silly people. Who opens an account without knowing the rules? The title of this video had me intrigued but it's all very basic knowledge the user must know ahead of time or they will end up paying fees or more taxes than they need to be
Great video. I did not realize one could withdraw the amount and the new deposit limit back into the account included the growth. I have a TFSA with a small amount but plan to top it off this year as i will be retiring soon and plan to commute my DB plan. I basically never used the TFSA but see how it can be leveraged….but as other commenters said, Govt will be onto us soon😒
Great video. One tip I will add.... Contribute to your TFSA as soon as you can. Don't wait until the end of the year. We already contributed the max for 2022. What leave money outside that will be taxed? We always put the max on the first day possible and then wait a few days or weeks for the market to pull back and then buy an ETF. Sure enough, the NASDAQ dropped 5% this week, so we jumped on the chance. I'm sure you know, but I'd bet most of the readers here don't, the NASDAQ ETFs have returned over 20% / year average for over the past 10 years! Nothing comes close to that :) I'm glad I found your channel, I see many videos that I will be watching. Keep up the great work!
I agree with you 100%. you even use the same wording that I do eg. Tax free "savings" account vs Tax free "investment" account. I wouldn't have gone with the title, because not everyone is using thier TFSA incorrectly. That being said, who cares what my opinion is on that, I'm just some guy on the internet.
From my understanding, your contribution limit is not affected by either capital gains or capital losses. Therefore, wouldn't your example of withdrawing $100,000 be wrong? Even if you took out all of your money, you'd still only be able to contribute your previous limit ($81,500) plus your new 2022 additional limit ($6,000). Could you explain this?
Day traders beware! The TFSA is a Tax Free Investment Account with certain limits. If you trade in stocks, let's say, there are limits to how much trading you do until the CRA gets to notice you. There are investors who have accumulated millions in their TFSAs. As far as the CRA is concerned they are conducting a business, and will be taxed accordingly.
@@freethinker3131 For some investors growth is more than expected, for others it is less. For those who expect millions from their TFSA, they have to go outside the bounds of what the CRA expects. I have heard of people reaching those heights, through day tradition, buying penny stocks etc. These people will be audited by the CRA, to see if their activity falls within the bounds of what a TSFA investment vehicle is supposed to be. If not you will be taxed on your gains. Now if you had started investing your TFSA money in BITCOIN, let's say, from the get go, and the CRA doesn't object to the gains made since then, maybe you keep all the money.
Ok very big caveat here. You can't say "yes you can invest in crypto with your TFSA". The answer is absolutely not, you can't invest in crypto, but you can invest in stocks and some ETFs track crypto currency. That's a very big difference. Just like you can't trade commodities or futures or forex in a TFSA, but you can probably find an ETF that can give you similar exposure.
@@ParallelWealth Ya that's true. I'm just imaging someone just getting started to invest arguing with his financial adviser saying the internet told him he can buy bitcoin in his tfsa :)
I've had a tax-free savings account since they began. I have just been putting money into it since. From this video it sounds like I can choose what investments my TFSA is doing? I don't understand. Am I'm suppose to meet with my bank's financial advisor (like I do for my RRSPs) and chat or what? I'm so confused.
Dividends can technically create new contribution room the following year after withdrawing them. If I pulled out 4k worth of dividends in 2021, I would have 10k room this year (4k + the new 6k for 2022). The key word is withdrawn, if they stay in your account there is no additional contribution room created.
@@User_not_found_403 I beg to differ. This isn't withdrawing a contribution as the initial capital is still invested, the TFSA account grew by the amount generated by the dividend which is then withdrawn, creating contribution room for the following year. A common scenario for retirees relying on dividend cashflow to lower their taxable income.
@@chrisskyllas1309 I don't see it that way. TFSA does not distinguish between dividend income or capital gains within the portfolio. It only cares about value of your contribution and value of your withdrawal. There's no additional contribution room created. You are simply replacing what you withdrew. Additional contribution room comes in the form of the annual increases. The tax free growth happens inside the TFSA account through value appreciation or dividends.
Hi, so for example I sell my stock that is worth $10000 but I keep it in tfsa account and not withdraw it to my cheqing account. I can use the $10000 to buy other stocks in the same year without using the contribution limit right? Cause I didn't pull it out of the tfsa account and since the $6000 contribution limit is the money you put in the tfsa account not what I buy?
If you have the room you can transfer stocks to your TFSA. I've done that almost every year transferring stocks from my cash account to my TFSA usually in Jan or Feb. It's totally legal. If you can do it after a market crash than it's even better!
You do not get the contribution room if you are not a resident for tax purposes so Canadians living abroad loose those years contribution they are not residents of Canada.
Im using it for my down payment on my condo in 2 years as opposed to using my rsps then paying it back over a course of 'x' amount of years--i may get a small tax credit/rebate inevitably if i use my Rsps but the amount i have to pay back isnt worth the amount of tax credit i'll recieve--rsp down payments are scams
I'm considering investing in Gold Royalty Corp. (GROY:NYSE) and holding it in my TFSA account. It is a Canadian company, operates as a corporation, and not a royalty trust, despite it's name, pays a dividend. Will there be a withholding tax of 15% on this dividend as it trades on the NYSE and not on the TSX or TSXV?
Can you use TFSA with the smith maneuver? What kind of investment that can be in the TFSA account to generate income ? Would that generated income has to be put back in the TFSA ? Thank you
OAS should be based solely on number of years a Canadian has lived in Canada after 18 to the time of filing for it. Supplemental income is determined by total income, including withdraw from RRSP, but withdrawal from TFSA is not counted as part of that total income.
Hmmm im confused, Say if your contribution limit is 81,500 but you only put 10,000 in to your TSFA, you invest that 10,000 and it grows to 20,000 and you withdraw 10,000 leaving the original 10,000 in the TSFA. Then a new year rolls by, is my limit only 10,000 or can i still put up to 81500
Awesome explanation and very descriptive! Thank you ☺️ i have a quick question lets say in my TFSA i have 1000$ in XYZ company.. which grew to $1500 , i sell 500$ worth of the share(just selling so money is still in the trading application i.e. not withdrawing to my personal bank account).. now my trading app has 500$ amount as available to trade so my question is if i buy 500$ of ABC share will it affect my tfsa contribution room?
No it won't affect your contribution room. The $500 capital gain or any other capital gains like dividends on your stocks/etfs/mutual funds inside your TFSA do not affect the contribution room. You could have a stock like Shopify in your TFSA & if for example it's now worth $400,000 it's ALL TAX FREE and that also wouldn't affect your contribution room.
Thanks!! I had no idea! I thought you could only put in the $6k in January and not a penny more!! Good to know!!!! I’m assuming the amount I can contribute is also in my tax assessment from the previous year?
@@shaneb472 I've heard that the CRA updates your contribution room for Jan 1st only by March and if you add anything after that the CRA won't update their system until the next year. I would strongly suggest that you keep track of your contribution room yourself. I've always done it myself...... It's very simple math.
@@henryhonda8408 you’re correct, they just show you your contribution room available at the beginning of the year. You’re responsible for tracking your contributions throughout the year to avoid over-contributing.
Can I invest in Crypto with my TFSA? What about tulip bulbs? I'm bullish on tulip bulbs. Can't miss money, those things. Great video, Adam, as always, clear and helpful.
@@kylebriggs8619 I only know for sure that you can buy crypto ETFS in your TFSA. I'm not aware at this point that you can hold actual crypto currency in it. I'm no expert but I do watch the business channels on TV like BNN & CNBC every business day and I'm subscribed to quite a few folks on RU-vid like this.
In regards to the successor beneficiary topic, is the tfsa the only account that applies to, or are there other accounts and investments that being named a successor would be beneficial.
Yes, but technically the RRIF and LIF can have successors. But the TFSA is the main concern. On the RRIF and LIF if you name a spouse as beneficiary it's all the same.
Another information is do not trust the amount of contribution room you have remaining, in the CRA website that you log into. It is not 100% accurate. Because they do not receive all information from all your brokerages until somewhere in the middle of the year. This will help you avoid over contribution and they will give you penalty. You must calculate and track on your own
If you have a, lets say $10,000 loss in your TFSA with an initial investment of $15,00.I f you transfer that to another account or redeem the market value of $5,000 can you re-contribute the book value or just the $5,000 market value? Thanks
Hi Adam! Thanks for the video. In your 100k withdrawal example - if 106k is the limit for 2023 and no contributions are made that year, is the contribution room 106k+6k for 2024?
Hi Adam, I like your explanation and I need to know if my TFSA account grow up and I withdraw some of the dividend payment, will it consider TFSA withdrawal?
Darn, obvious that most of us are missing out on benefits of TFSA's. Am a day trader and have just paid taxes etc as normal income, however, is there any way that money from a TFSA used to day trade can shield some/all taxes?? Thanks for the video
What they will look at is length of time you held the stock. So you can make a bunch of trades in a day if you plan to hold those equities. The ins and outs are what they will get you on. It's an investing account, not trading account
So if I saving money for retirement in TFSA and when I read the time 65 I can take out the money what ever I want and it doesn’t effect the CPP or OAS at all ?
Adam - could you please do a video for 19 year olds (young adults) regarding the do’s and dont’s with their young money. My 19 year old son has Max’d his TFsA but now we don’t know what to do with his excess. We HATE RRSp’s and want other options. He’s very interested in trading but still lots to learn. Any suggestions?
Non-reg account at that point. Small tax bill to pay, but allows him to continue to grow wealth. Plus super flexible for home purchase etc down the road.
Damn so if you lose money then you also lose the contribution room you should be entitled to. This makes no sense. Lol thanks for kicking me while I’m down, government!
Very informative, one of the best videos I’ve seen on TFSA, I feel like I’m hearing myself taking to my clients. A lot of Canadians have TFSAs but don’t know how to utilize it, a significant amount of my clients have their money sitting in savings deposit or GICs not taking advantage of investing tax free.
Hi there, very informative video! Just wanted to know, if my tfsa isn't topped up to the maximum number yet, can l just put the full amount till it is, or just the 6 thousand allowance per year?
Hey Adam, can move the equities out of the TFSA to lock in the new higher ceiling and then move them back in the following year? Or do I have to liquidate the equities and turn them into cash in order to take out and lock in?
Wat about immigrants who land in canada at later age as a PR, meaning i landed as pr when i was 27 and today i am 33 and citizen shud i calculate in Ontario from my age 18 or age 27?
