Maybe It Shouldn't Have Been Called a TFSA...

TFSA has a terrible name

The Tax Free Savings Account has been around since 2009 and provides individuals who are 18 and older and who have a valid social insurance number a way to set aside money tax-free throughout their lifetime.

A Statistics Canada report released in 2017 shows that while TFSA contributions are growing in popularity, TFSA withdrawals are becoming more common as well. "Both the frequency and magnitude of TFSA withdrawals are significantly larger than for RRSPs," the report indicates. One reason for this could be an unfortunate name liking the TFSA to a daily savings account.

“It should have just been called a Tax Free Account,” explains David MacRae, Investment Services Manager at Cambrian Credit Union.  “When members work with our advisory team, the TFSA becomes a critical account type that factors into their overall retirement strategy.”

The TFSA is an excellent account to accumulate and grow wealth.  Members can use their TFSA towards a short term goal such as saving for a family vacation, and for long term benefit when built into their overall retirement plan.

“When included as part of the retirement plan, the TFSA is an important account as it allows for better layering of income when a member retires.  Implementing an income strategy that strategically draws from all retirement accounts with consideration of CPP & OAS payments will allow for better navigation of the tax brackets and to preserve income tested government benefits,” says MacRae.

Making the most of your TFSA, especially as part of your retirement planning, is one of the many reasons why it’s beneficial to work with Cambrian’s advisors. MacRae points out, “We strive to deliver on our investment philosophy which includes focus on members understanding what they own and why they own it”.