The document discusses the Tax-Free Savings Account (TFSA) introduced by the Canadian government in 2008. Key points: - Canadians over 18 can contribute up to $5,000 annually to a TFSA, with unused contribution room carried forward and annual increases for inflation. - Earnings and withdrawals from a TFSA are completely tax-free and contributions can be reused after withdrawals. - TFSAs allow for effective savings of short and medium term goals and can supplement retirement incomes. - Contributing the maximum annually from age 40 for 20 years could result in around $266,300 in savings based on 8% annual growth.

1. Barry Dowling TFSA In the 2008 budget the Federal Government introduced the Tax Free Savings Account (TFSA) available to all Canadians over 18

2. Barry Dowling TFSA Individuals may open an account contributing up to $5,000 annually (increased annually by inflation)

3. Barry Dowling TFSA Unused room can be carried forward Any RRSP investment is eligible for the TFSA

4. Barry Dowling TFSA All earnings and withdrawals are tax free Withdrawals can be for any purpose Money taken out can be later returned without effecting the contribution limits

5. Barry Dowling TFSA TFSA will allow more effective savings for short and medium term goals TFSA can supply a generous supplement to retirement incomes

6. Barry Dowling TFSA If you are 40 and contribute for the maximum next 20 years your value could be $266,300, based on 8% *2% inflation ** 8% annual growth $276,979.00 $7,000.00 20 $249,462.00 $6,500.00 19 $224,483.00 $6,500.00 18 $201,355.00 $6,500.00 17 $179,939.00 $6,500.00 16 $160,111.00 $6,500.00 15 $141,751.00 $6,000.00 14 $125,251.00 $6,000.00 13 $109,973.00 $6,000.00 12 $95,827.00 $6,000.00 11 $82,728.00 $6,000.00 10 $70,600.00 $5,500.00 9 $59,871.00 $5,500.00 8 $49,936.00 $5,500.00 7 $40,737.00 $5,500.00 6 $32,219.00 $5,500.00 5 $24,333.00 $5,000.00 4 $17,530.00 $5,000.00 3 $11,323.00 $5,000.00 2 $5,400.00 $5,000.00 1 Value** Contribution* Year

7. Barry Dowling TFSA In order to save 266,300 after tax in an RRSP you would need $465,000 based on a 43% tax bracket

8. Barry Dowling TFSA For seniors that are forced to withdraw more than they need from their RRIFs and Pensions, deposits into a TFSA allow them to earn, tax free, immediately

9. Barry Dowling RRSP vs TFSA Which is better?

10. RRSP vs TFSA TFSA Contributions are after tax dollars Tax free growth Carry forward unused room Tax free upon withdrawal Contribution room can be reused No forced withdrawal RRSP Tax deductible contributions Tax sheltered growth Carry forward unused room Fully Taxable upon withdrawal Contribution room only usable once Forced withdrawals at age 71

11. Barry Dowling TFSA vs RRSP Each type of account has a purpose They can be most effective when used in conjunction with each other

12. Barry Dowling TFSA vs RRSP While not everyone should necessarily have an RRSP Almost everyone should have a TFSA

13. Barry Dowling Tax Free Savings Account If you have any questions or concerns, please feel free to contact me. Thanks