The Globe and Mail reports in its Saturday edition that because tax-free savings accounts have only been around since 2009 and yearly contribution room is limited, TFSAs will not typically have enough money in them to meet an individual's entire retirement-income needs. The Globe's Rob Carrick writes that registered retirement plans and non-registered investments will also play a role.
TFSAs were designed to be versatile. People use them to hold savings, or investing to generate both growth and dividends.
However, with registered retirement savings plans and registered retirement income funds so well entrenched, TFSAs may not be considered as much as they should be for use by seniors as a retirement vehicle.
"When people ask me what to do first, I say that I think the TFSA is more important than the RRSP," said Nancy Woods, an investment adviser with RBC Dominion Securities.
"The best two tax-sheltered vehicles -- your home and your TFSA."
Mr. Carrick notes that the retirement-income TFSA offers two levels of tax freedom.
Income paid into your account in the form of dividends, bond interest and more is sheltered from tax -- and so is all money withdrawn from the account.
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