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Dale Jackson

Your Personal Investor


How can something so simple get so complicated?

The tax-free savings account (TFSA) allows investments to grow tax free – simple. Yet a new survey conducted by Pollara for BMO finds only 73 per cent of respondents consider themselves at least somewhat knowledgeable about TFSAs. Here are some of the other findings:

  • 34 per cent aren’t aware that over contributing will result in a penalty. (One per cent each month on the excess amount).
  • 45 per cent aren’t aware of, or incorrectly identified, which investments are eligible to be put into a TFSA. (Any investment that can go into an RRSP).
  • 42 per cent believe that contribution limits are linked to income.

The final finding is an entirely different can of worms. Contribution limits are the same for every Canadians over 18. However, the allowable amount sometimes changes from year to year.

$5,500 was added to the total allowable limit in 2018 for everyone over 18, taking the cumulative contribution limit to $57,500. Total limits can vary from individual to individual, depending on withdrawal amounts, which are restored each year.

The best way to find your limit is through your personal account with the Canada Revenue Agency (CRA). Even then, it’s not that simple. The CRA only keeps track to the previous year. In other words, it will show your allowable contribution limit up to Jan. 1, 2018. You must subtract any contributions you have made this year.     

Editor’s note: An earlier version of this story included inaccurate contribution information for 2016-17. BNN regrets the error.