In the world of retirement investing options, there’s one savings plan that stands out head and shoulders above the rest. It’s easy to set up, is simple to maintain, and comes with tax advantages that enable you to build wealth and increase your retirement savings for the long haul.

That’s right—we’re talking about aTFSA.

Maybe you’ve heard about these retirement savings accounts, but you haven’t had time to discover if it’s a good option for your retirement. Stick with us as we the answer the most common questions about TFSA's and show you how this mighty little savings account is designed to turbocharge your retirement savings over time.

1. What is a TFSA?

A TFSA (Tax Free Savings Account) is a retirement savings account that allows you to pay taxes on the money you put into it upfront.

There are two big advantages of these after-tax contributions: First, the money you invest in your TFSA grows tax-free. Second, you won’t owe taxes when you withdraw your money in retirement. So, if your account grows by hundreds of thousands of dollars over time, you won’t owe taxes when it’s time to use that money when you retire! Talk about a win!

Here are a few more details:

• TFSA accounts are savings accounts that you open and maintain outside of your employer retirement savings plan.
• Since TFSA withdrawals are tax-free in retirement, they’re a smart option for folks who expect to be in a higher tax bracket when they retire.
• You can choose beneficiaries to inherit your account, and they will be able to withdraw funds tax-free as well.

2. How is a TFSA different from a traditional RRSP?

That’s a great question. The main difference between a TFSAand a traditional RRSP is how they are treated for taxes. Take a look at a side-by-side comparison:

Just remember, for 2017, the total amount you can contribute to either a TFSA can’t be more than $5,500—

3. Am I eligible for one?

Do you have money in your own bank account? Then, yes. You’re eligible. However, you can’t contribute more than maximum for that years limits.

As long as you have money, you can continue to contribute to a TFSA after age 70 1/2, the cutoff for traditional RRSP contributions.

4. Are there income restrictions?

You knew there had to be a catch! —$5,500 PER YEAR to a TFSA. If you were 18 or older in 2009. there are diiferent levels per year up to a maximum.

5. Can I set up a TFSA for my spouse who doesn’t work?

Yes. If he or she has a chequing account in their name (joint accounts are fine) Above limitations are the same.

6, How do I set up a TFSA?

The best way to open one is through an experienced investing professional who will meet with you face to face.

They’ll have the knowledge and experience to educate you on your new investment choices. You can invest in almost anything through your TFSA, but we recommend guaranteed investment funds because they have the potential to help you build wealth over time—especially with a TFSAs tax benefits. and the elimination of losses.

Many guaranteed investment fund companies will allow you to start a TFSA with as little as $50 per month, so there’s no need to put off opening your account until you have enough money to start investing.

Before you meet with your investing pro, you’ll need to gather some information and fill out the application. You’ll need the following information to open your account:

• Your driver’s license or other form of photo identification.
• Your Social Insurance Number
• Your bank’s routing number and your checking or savings account number.
• Your employer’s name and address.

As part of the process, you’ll also choose a beneficiary (or beneficiaries) who will inherit your TFSA. You’ll need their name, Social insurance number and date of birth.

Next, you can make your initial deposit and/or set up automatic contributions. You can open your TFSA with a lump sum up to the annual limit. Or you may choose to deduct a specific amount from your bank account each month to contribute. You can also do both as long as you don’t exceed the contribution limit for that year.

8. How do I maintain it?

Once you choose your guaranteed investment funds for your TFSA, it’s important to stick with them for the long haul. Don’t get spooked when the market ebbs and flows. The value of your TFSA will rise and fall with the stock market, but it has a guaranteed value over its lifetime, don't worry, you will see a steady growth trend. Just continue making regular contributions and stick with it despite possible market volatility. volatility doesn't affect you.

Over 30 years, if you invest the annual max of $5,500 into a TFSA, it could grow to $995,000. The best part is, your contributions would only be $165,000, and the rest—$830,000—would be growth.

I’m ready to start! Now what?

Opening a TFSA is as easy as opening a checking account. The best way to get started is to contact your financial advisor who can guide you on the set-up process. If you don’t have a financial professional, reach out to a SmartVestor Pro in your area who is committed to educating and empowering you to make the best decisions possible for your retirement future.

Be Confident About Your Retirement.