Quote:
Originally Posted by Red Ice Player
I figure its around 500 bucks a month. I'm all for raising the eligibility age, but not in favour of scrapping the program. Getting rid of it would really hurt low income seniors. Instead, radically alter the means requirements. Too many are collecting it that don't really need it. I come from the later portion of the baby boomer generation, so this proposed legislation means my eligibility starts 14 years from now instead of 12. I'm not going to lose sleep over that. I would suggest to the people in my situation and to those who are younger to start contributing as much as they can to the best savings vehicle available today, the TFSA. I used to strive to max out my RRSP, but I won't do that again until my Tax free savings account is maxed. I am assuming that you are some sort of investment consultant Slava. It would be a great benefit to the members of CP if you could expound on the TFSA and its advantages. Most people give me a blank stare when I ask them if they have a TFSA. I wish the TFSA had been around much earlier in my working life.
|
Ya, I do agree that for low income seniors there should be a program; there is also the Guaranteed Income Supplement (GIS) for low income seniors. I suppose if they dropped the clawback to start at about $30k and it was totally clawed back at about $65k I could see that working.
The TFSA is a great account and I do think that it will be a large factor for financial planning going forward. Even this year the limit is at $40k for a couple, plus growth. Thats a significant sum of money for most people and soon enough it will be enough to build a reasonable portfolio with. A few years ago there were quite a few people who used the account for either really low risk investments (because it is called a savings account and many didn't realize it could be invested), or high risk or speculative investments (because it was only five grand). Now I see more planning and thought given to these investments though and as the amounts rise I think you will see more of that.
Overall there are a few major benefits to the TFSA. You don't pay taxes on gains, or on withdrawals. That is a huge benefit over an RRSP; while the RRSP gives you a tax break when you invest, it really defers that tax until you withdraw it. The other major benefit is that you can withdraw funds from the TFSA and not lose the room. So if you take $5000 out for something you can reinvest that again the next calendar year. In an RRSP (unless its a specific program) you don't have that flexibility and once you withdraw that contribution room is gone.
Feel free to ask any questions you have or send me a PM if you prefer.