Most of Canada to receive emergency alert test today
The federal government will test its capacity to issue emergency alerts today, with the exception of Ontario, where the test will take place on May 15.
The federal government’s latest TFSA contribution limit increase took effect as of January 1, 2023. This was the largest limit increase implemented since 2015.
Tax-free savings accounts (TFSAs) can hold cash like a regular savings account to earn interest or hold investments such as stocks, ETFs, mutual funds, and more. Any profits earned within a TFSA account are not subject to tax. However, there are limits to how much you can contribute to a TFSA account.
Below, I’ll outline how the government’s most recent TFSA contribution limit increase affects you and how to make the most of it.
In 2009, the federal government launched the TFSA program to incentivize Canadians to save and invest more money. Today, TFSA accounts are one of the most popular banking accounts offered by financial institutions.
Every year since 2009, the government has steadily increased the contribution room for TFSA accounts, allowing Canadians to save more money over time.
In 2023, eligible Canadians can contribute up to $6,500 more to their TFSAs.
With this year’s $6,500 TFSA limit increase, your total contribution room for 2023 is $88,000 if you qualified for the TFSA every year since its 2009 inception.
As a simple example, if you turned 18 in 2023 and have a valid SIN number and are a resident of Canada, your contribution room would begin that year, so it would amount to $6,500.
If you turned 18 in 2009 or earlier and have a valid SIN number, and were a resident of Canada for every year from 2009 - 2023, your contribution room would be $88,000.
If you didn’t qualify for the TFSA every year, you’d have to deduct that yearly amount from your total contribution room.
For example, if you moved abroad in 2022 and 2023 and became a non-resident, you’ll need to deduct $6,000 and $6,500 from your total contribution room, as those were the contribution limits for those years.
Your unused TFSA contribution room from previous years can be rolled over to future years.
For example, the TFSA contribution limit for 2022 was $6,000. If you only contributed $4,000 to your TFSA last year, you can contribute an extra $2,000 this year on top of the $6,500 contribution limit for 2023 (for a total of $8,500).
The same applies to any unused contributions from previous years, dating back to when the TFSA program first started in 2009. This is an excellent feature of the TFSA and one that allows for the maximum flexibility of contributions.
The government has strict rules regarding TFSA maximum contribution limits. The CRA imposes a 1% fine for the highest excess amount in the account throughout the course of the month.
For example, if you over-contribute by $1,000 and the money stays in your account past the end of the month, you’ll be subject to a $10 fine every month that it remains in your account.If the $1,000 excess contribution remains in your TFSA from the beginning of the year through to the end of the year, then you will owe a total of $120 in fines to the CRA.
There is no limit to how many TFSAs you can have. However, the same total contribution limit applies to you whether you have one TFSA or ten TFSAs.
One benefit I can see of having multiple TFSAs could be that you want to have separate uses for each one. For example, you could have one TFSA for your emergency funds that are held in a savings account and another TFSA for your investments.
With this in mind, it’s simpler to have fewer TFSA accounts as it’s easier to keep track of and manage.
Despite its name, TFSAs aren’t just meant for holding cash and savings. If your risk tolerance allows for it, it is best used for investing. Here are some examples of the types of investments you can hold in your TFSA:
You aren’t taxed on any money earned within the TFSA account.
For example, if your investments grow by $5,000 in a year, you can withdraw this profit without paying any taxes on it. Additionally, TFSA account earnings don't affect your total contribution limit for the year, as contribution limits only apply to outside money deposited into the account.
For these reasons, I believe that the TFSA is an invaluable investment account and that all Canadians should take advantage of its benefits.
It might make sense to invest in your Registered Retirement Savings Plan (RRSP) before your TFSA if you are a very high-income earner. But for most Canadians, it would be wise to max out their TFSA accounts before considering using another account.
Christopher Liew is a CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers on his Wealth Awesome website.
Do you have a question, tip or story idea about personal finance? Please email us at dotcom@bellmedia.ca.
The federal government will test its capacity to issue emergency alerts today, with the exception of Ontario, where the test will take place on May 15.
Canadian immigrants threatened by hostile regimes are urging parliamentarians to quickly pass the 'Countering Foreign Interference Act' so they can feel safe living in their adopted home.
Prince Harry, the Duke of Sussex, has made headlines with his recent arrival in the U.K., this time to celebrate all things Invictus. But upon the prince landing in the U.K., we have already had confirmation that King Charles III won't have time to see his youngest son during his brief visit.
A long-simmering feud between hip-hop superstars Drake and Kendrick Lamar reached a boiling point in recent days as the pair traded increasingly personal insults on a succession of diss tracks. Here’s a quick overview of what’s behind the ongoing beef.
The Israeli military said Wednesday that it has reopened the Kerem Shalom crossing into Gaza, a key terminal for the entry of humanitarian aid that was closed over the weekend after a Hamas rocket attack killed four Israeli soldiers nearby.
An Ontario woman said it would have been impossible to buy a house without her mother – an anecdote that animates the fact that over 17 per cent of Canadian homeowners born in the ‘90s own their property with their parents, according to a new report.
With Donald Trump sitting just feet away, Stormy Daniels testified Tuesday at the former president's hush money trial about a sexual encounter the porn actor says they had in 2006 that resulted in her being paid to keep silent during the presidential race 10 years later.
Susan Buckner, best known for playing peppy Rydell High School cheerleader Patty Simcox in the 1978 classic movie musical 'Grease,' has died. She was 72.
A chicken farmer near Mattawa made an 'eggstraordinary' find Friday morning when she discovered one of her hens laid an egg close to three times the size of an average large chicken egg.
An Ontario man says he paid more than $7,700 for a luxury villa he found on a popular travel website -- but the listing was fake.
Whether passionate about Poirot or hungry for Holmes, Winnipeg mystery obsessives have had a local haunt for over 30 years in which to search out their latest page-turners.
Eighty-two-year-old Susan Neufeldt and 90-year-old Ulrich Richter are no spring chickens, but their love blossomed over the weekend with their wedding at Pine View Manor just outside of Rosthern.
Alberta Ballet's double-bill production of 'Der Wolf' and 'The Rite of Spring' marks not only its final show of the season, but the last production for twin sisters Alexandra and Jennifer Gibson.
A mother goose and her goslings caused a bit of a traffic jam on a busy stretch of the Trans-Canada Highway near Vancouver Saturday.
A British Columbia mayor has been censured by city council – stripping him of his travel and lobbying budgets and removing him from city committees – for allegedly distributing a book that questions the history of Indigenous residential schools in Canada.
Three men in Quebec from the same family have fathered more than 600 children.
A group of SaskPower workers recently received special recognition at the legislature – for their efforts in repairing one of Saskatchewan's largest power plants after it was knocked offline for months following a serious flood last summer.
A police officer on Montreal's South Shore anonymously donated a kidney that wound up drastically changing the life of a schoolteacher living on dialysis.