75% of Canadians Use Their TFSA Wrong...Do You?

A recent study came out that 75% of Canadians either do not have a TFSA, or are using their TFSA incorrectly. In this video we'll go through why that is the case, and some action steps you can take so you can start start to see your TFSA grow.

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DISCLAIMER: The videos and opinions on this channel are for informational and educational purposes only and do not constitute investment advice. Adam Bornn is not registered to provide investment advice and as such does not provide recommendations - those looking for investment advice should seek out a registered professional. Adam is not responsible for investment actions taken by viewers and his content should not be used as a basis for investment trades.

[AdamEarl]

I stopped TFSA contributions about 2yrs ago, and focused on doubling mortgage payments and maxing out annual lump sum payments. In about 38 weeks I expect to be mortgage free on my principle residence. I am 38.

[davidmcquaid]

During covid when the markets went down the toilet I took the chance to max out my TSFA as much as I could. My contribution room now is $125 a week as it's $6, 500 for the year. But my TFSA is now over $120K.

[chrisjeanneret]

Great video. Just to mention that there is also a transaction report available on MyCRA, which can be handy if you have had multiple contributions and withdrawals, although there can be a significant delay in transactions showing up there.

[daviddean]

Just watched it thank you, Adam now I’m going to watch it for the second time!

[pokergeniusordonkey]

This guy is great.

He helped me really understand my TFSA by responding to my comment in a previous video.

I now how have more comfortable risk for my goals.

I have less risk in my TFSA so that I will never be taxed on the guaranteed returns.

I have more risk in my RRSP, so that if it doesn't do well, at least I will owe less taxes.

If my RRSP riskier stuff does well, I will owe some taxes, but it also did well, and that's great, and the govt was taking part of the risk with me, so I'm just paying them their cut of the profits.

[plusfour]

Question: should I be prioritizing contributions to my TFSA over my RRSP?
So, as far as asset mix in my TFSA vs RRSP vs non registered investments, I should look at them as a whole umbrella but my TSFA should have more risk (and greater potential gains) than my RRSP because RRSP withdrawals are 100% taxed? I know that there is a large benefit at the point of contribution to RRSP's especially if I am in the years when my income is at it's greatest.

[jdavid]

do it TODAY!! love it. you are absolutely right. it should have been called TFIA. Lets hope that Canadians don't make the same mistake with FHSA. important message Adam.

[daviddean]

Hi, Adam. I just checked my CRA and I didn't know it had that information there:

As of September 4, 2023

As of January 1, 2023
2023 TFSA contribution room: $XX, XXX.XX

THANK YOU!

[jovicrazed]

I have a lot of contribution room that I'm working toward catching up on. I've stopped contributing to my RRSP and am focussed on the TFSA. The only good thing about the first two years of Covid is that I spent so little money on anything that I was able to pay off my HELOC a year or so ago (well before Prime skyrocketed) and have been aggressively putting funds into my TFSA.

[cliffc]

I keep stocks outdide tfsa since gain is half taxable and deferred. You r right thst savings account should not be in tfsa. Put five yr gics in tfsa.
I also put canadian stock etf in tfsa because of grossup of dividends.

[metalpolishshop]

Depending on how you invest the TFSA cannot hold All kinds of investment strategies. For example you cannot sell covered calls for extra income.

[marionsutcliffe]

Rrsp and tfsa maxed, mortgage free, retiring soon. I will be drawing down rrsp as evenly as possible over 30(?) years. Income shortfall filled with non-reg savings then with TFSA. Funneling non reg savings into tfsa each year to shelter from tax. That is my tax minimizing drawdown strategy.

[huejanus]

I’m in my early 60’s so my portfolio leans somewhat towards the conservative side. If you look at my portfolio as a whole, the more aggressive holdings are in my tfsa and the more conservative ones are in my rrsp. I’m trying to make it so the stocks that make a higher return end up where they can be withdrawn later tax free.

[murraytown]

The appropriate TFSA strategy depends on one’s age, investment horizon and purpose of TFSA proceeds. It may be that a savings approach may be entirely appropriate. The key message is to calibrate based on personal circumstances.

[Andrew-jefm]

Doesn’t the contribution limit get updated January 1st each year? I don’t think your tax refund matters at all for this.

[CanadaGTA]

US withholding taxes should be mentioned in this video, as well as the importance of a "Successor Holder" and not a "Beneficiary." I realize this is just a really basic video, but both of these are important for anyone who isn't working with an advisor to research.

[BrianJordan-jkdo]

Thanks for all of the informative videos Adam.
Currently, I hold all of my ETF investments that are listed on US stock exchanges in my RSP to avoid US withholding taxes. In my TFSA I hold all of my ETF investments that are listed on Canadian stock exchanges. Could you please advise if I were to put additional US-listed ETFs in my TFSA would those ETF gains/income be subject to US withholding tax? Thanks.

[seanwilliams]

One important thing I did not see in the video (I may have missed it admittedly) is that not ALL income generated from a TFSA is tax free. You can't use your TFSA for day trading as an example. Should you happen to get lucky at day trading and make a huge profit, the CRA will likely audit and you will have to pay tax on the income generated.

[diyako]

Hi Adam,
Thank you for the video. In regards to all earnings from investing your TFSA being tax free, is it the same if the investment is in US or International funds?

[garth]

So i have considerable room left in my TFSA account i also have the cash to maximize it.. the issue is my TFSA is only paying 1.5%.. thats terrible. Im making more money in my high interest savings account.

Im thinkhard about moving my money to another company.