Using TFSAs to plan ahead

Whether you’re getting married, saving to buy your first home, going back to school, or taking an extended vacation, a Tax-Free Savings Account (TFSA) can help you get there, by allowing you to accumulate earnings tax-free. Follow these tips to use TFSAs to help you reach your milestones.

• Try to make the annual maximum contribution. (The annual contribution limit for 2016 is $5,500¹.) If you can’t, contribute as much as you can.
• Consider how long you think it will be before you will need to draw the money. If you expect to draw on it soon, consider a more conservative investment.
• Think of the TFSA as a partner to the RSP. Use your TFSA for shorter-term goals. One strategy is to make your RSP contribution, and deposit any refund generated into a TFSA.
• Use the TFSA to save for a down payment or a return to education. That’s because you won’t pay any tax on the amounts you withdraw. And, unlike withdrawing funds from a Retirement Savings Plan (RSP) under the Home Buyers Plan (HBP) or Lifelong Learning Plan (LLP), you don’t have to pay this money back, if you choose to do so, until you are ready.
• One of the easiest and most effective ways to put money into a TFSA is by setting up a Pre-authorized Transfer Service, and contributing a smaller amount on a regular basis.
• Once you’ve opened a TFSA, you can contribute at any time through EasyWeb Internet banking or EasyLine telephone banking. Or use the TD mobile app to transfer money using your mobile phone.

Learn more about the TFSA and how you can get started saving. Or visit your nearest TD Canada Trust Branch to open a TFSA today.