Over the past year, the subject of how long the government will keep the TFSA around has come up regularly. Some questions investor may be asking are the following:
- Will the government keep the TFSA account available for the long term?
- Will they amend it?
- Will they cancel it?
- Will they tax it?
Investors have seen the TFSA as a great tax haven. Without the government really providing end dates, investors are taking advantage of it but are curious if it’s too good to be true.
I have spent time thinking about this and although astute investors and tax planners will significantly take advantage of it. Most of the general population will not. You only need to look at RRSP and how the population doesn’t maximize it. From statistic Canada, statistics show that 6 in 10 families had RRSP in 2005.
My co-workers either do not know what a TFSA is or they do but have not used it. It leads me to think that the TFSA usage will probably be similar to RRSP in which case, most of the population will not leverage it. That is until ‘Financial Literacy’ increases … which will happen who knows when?
Do you think TFSA accounts are here to stay? Are you leveraging it?
Happy Tax Saving!
FROM FAT TO FIT 