The next section of the Action Financial Group Orientation Series will deal with Investment Account Types.
An account is not an investment; it is a container that holds one or more investments. Different containers have different features such as size, shape or colour, one hole in the bottom or none, a lid or no lid; different accounts have different features too, such as tax treatment, size limitations, or rules about contributions and withdrawals. Not all accounts are suitable at different life stages or circumstances and it’s always best to seek advice.
Tax Free Savings Accounts
TFSA = Tax Free Savings Account is an account type used to accumulate retirement savings or any other short, medium or long term savings. Contributions are limited to the contributor’s TFSA contribution room as determined by Canada Revenue Agency (CRA) and based on the annual contribution limits established for the plan. Individuals start accumulating contribution room the year in which they turn 18 and in calendar years starting in 2009. Amounts contributed to a TFSA are not tax deductible. Any investment growth or income within the plan accumulates tax free. All withdrawals (contributed capital, growth and income) from a TFSA are tax free whenever they are withdrawn. Amounts withdrawn from a TFSA are added back to the contribution room on January 1 the year following the withdrawal. Overcontributions are penalized at the rate of 1% per month on the excess amount.
There will be more Investment Account Types discussed over the next few weeks. We hope you will find this information valuable and will increase your financial confidence. You can always find these articles on our website www.actionfinancialgroup.com.
Karin Rimnyak, Certified Financial Planner®
Investment Advisor
David Dryburgh, Certified Financial Planner®
Investment Advisor
Ian Barrie, Qualified Associate Financial Planner™
Investment Advisor
This information has been prepared by Karin Rimnyak who is an investment Advisor for iA Private Wealth. Opinions expressed in this email are those of the Investment Advisor only and do not necessarily reflect those of iA Private Wealth. iA private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.
