Quote:
Originally Posted by Red Ice Player
You have explained it very well. Frankly, I ignored the TFSA the first couple of years it was around. The name is misleading. I am building mine into what will become my main investment account. The fact that I will never have to declare a capital gain (and therefore not have to carefully record all my activity) in this account makes me get excited about investing again. You can keep on contributing to it as long as you live, as there is no cut off age like with the RRSP. I have read a snivelling cynical negative take on the TFSA (from who else, the Toronto Star) saying that its a gold mine for the investment community and a further erosion of the tax base. I say that its a reward for people who are willing to sacrifice some of their disposable after tax income early in their careers, and I believe it will make TFSA investors less of a burden on the taxpayer when they retire.
|
I think they should've called it the "Tax Free Investment Account", although the banks are likely thrilled with the current name. Its too bad, but hopefully more people start to learn about it anyway.
I actually do think that its a limited window for the TFSA though in terms of its tax treatment. I just can't see future governments letting you have a few hundred thousand bucks to draw on tax free as the need (see my thoughts on debt being left for future generations) and allure is probably too large to ignore. With no growth at all for a married couple at 35 today thats $250k that they would pay zero taxes on, both on the way up and when its drawn down. Just with prudent investing, that could easily be doubled and then some. It won't be enough to retire on alone at that point, but at todays tax rates thats roughly $200k in taxes the government has to ignore....from one household.