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Canadian Tax Free Saving Account

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February 26, 2008 – Comments (4)

The new Federal budget will include the following:

 Tax-free Savings Account.

Individuals will be able to put up to $5,000 a year into one of the accounts. Capital gains earned on investments in the account will be exempt from tax, even when withdrawn. Account holders will be able to withdraw money at any time without restriction. Unlike an RRSP, contributions to the new account will not be tax-deductible.

 

This is a pretty sweet deal.

4 Comments – Post Your Own

#1) On February 26, 2008 at 5:29 PM, QualityPicks (69.59) wrote:

Sounds similar to a Roth IRA :)

The trick then, is what your current tax rate is now vs. when you retire. If you pay 33% now because you are working and have high income, and when you retire you will have no income from a job and you are likely to be at 15% tax rate, then a tax deductible account would be better.

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#2) On February 26, 2008 at 6:00 PM, dwot (95.70) wrote:

I agree, and it encourages putting something away for a rainy day.  I really liked that.

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#3) On February 26, 2008 at 6:02 PM, wcaseym (82.51) wrote:

Fantastic!  Most beneficial to the Canadian chartered banks and the shareholders:  TD, BNS, BMO, RY...

Lot's more accounts to charge "fees" against: ... more profits!

... I'm absolutely lovin' it!

C.

 

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#4) On February 26, 2008 at 6:46 PM, DemonDoug (90.90) wrote:

oh man, it would be great if Roth's had no restrictions.  I'd put all my investments in there asap.

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