The Canadian Money Roadmap I answer 37 of your TFSA questions
Jul 7, 2025
Dive into the world of Tax-Free Savings Accounts with a comprehensive guide that clears up common misconceptions. Learn about eligibility, contribution limits, and smart investment options. Explore the intricacies of TFSA contributions and withdrawals, uncovering strategies that optimize retirement savings. Also addressed are penalties and how TFSAs impact government benefits, making this a treasure trove of knowledge for savvy savers!
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TFSA Basics Explained
- Understand a TFSA is a tax-free bucket to hold investments or cash, not an investment itself.
- Use the TFSA to save or invest while your money grows tax-free and withdrawals are also tax-free.
Manage Contribution Room Carefully
- Your TFSA contribution room accumulates every year and unused room carries forward indefinitely.
- Keep track of your contributions to avoid overcontributing and penalties.
Avoid TFSA Overcontribution Penalties
- Avoid overcontributing to your TFSA as you face a 1% monthly penalty on the excess amount.
- If this happens, remove the excess immediately and communicate with CRA to potentially reduce penalties.