Explain TFSAs to confused clients

We’re rapidly approaching the New Year and soon your clients will have another $5,000 in contribution room in their TFSA. On top of that, they’ll be able to replace any capital they’ve cashed out. But do you understand these rules?

A BMO survey found that Canadians were still foggy on TFSAs, especially when it comes to rules on re-contributing. Looking back through the Advisor.ca archive, it seems Canadians have never been entirely clear on how to use the TFSA (read TFSA confusion lingers, from 2010)

While the TFSA can be used for a multitude of planning needs, many advisors are working them into retirement plans as an alternative—or companion—to the RRSP. Here’s your chance to bone up and explain these accounts to any of your clients still in the dark.

RRSP, TFSA integral to a retirement plan The popular notion that RRSPs are only tax-deferred while TFSAs are tax-free is rooted in misconception, says Jamie Golombek, managing director of tax and estate planning at CIBC.

Plan confusion: RESP, RDSP, RRSP or TFSA? With so many plans to choose from, how do we best advise our clients on the optimal tax-preferred savings strategy?

TFSAs reduce retirement income risk We’ve all seen the pictures of fit, smiling senior couples strolling along beaches, gazing at sunsets. I can’t speculate on personal enrichment, but I do know that the financial aspect of retirement cannot be taken for granted.

Fixed retirement plans hurt clients How Canadians save for retirement may be as, if not more, important than how much they save, this according to a new report by the Certified General Accountants Association of Canada.

Effective income planning strategies, part two When people think of income planning, they usually think of retirement. Prior to retirement, Canadians are mainly concerned with paying debt and accumulating retirement assets, so they ignore income-planning opportunities.

Tax savings for the retiree Your client just finished his or her last day of work and tomorrow begins the new adventure of planning out the retirement years. He or she is now thinking about winter vacations, golf-course memberships, summer trips with grandchildren and possibly even a winter home down south.

Face off: TFSA vs RRSP Participants:

• Frank Wiginton, Senior Financial Planner, Tridelta
• Ed Rempel, Certified Financial Planner, Ed Rempel & Associates

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.