A recent article in the Globe and Mail published on April 17, 2016 talked about building a savings of $1 million dollars through your TFSA.
Intrigued? So was I. I had to read on to find out how.
First off; I am a huge fan of the Tax Free Savings Account (“TFSA”), specially if you make it work for you. It is a glorified savings account but through some research, I have found a 2% interest rate versus a regular savings account, through my bank, where they only offer 0.8% interest on my balance. Hello compound interest!
Once money goes into one of these accounts, it’s off limits to the Canada Revenue Agency. Your investment gains are tax-free, and so are withdrawals. But as much as we’ve latched onto TFSAs as in indispensable investing and saving tool, we may be under estimating their potential to create massive amounts of tax-free wealth.
Within the article, there is a link to a TFSA calculator to see if you’re heading in the right direction towards $1 million dollars over the span of your lifetime; check it out here.
How are your savings measuring up? As the saying goes; it’s better to start as early in your life as possible, but it’s also better to just be contributing something, no matter how small.
How did you find the article? Do you feel you are on the right track with your savings? Do you utilize the large contribution room through your TFSA?