TFSA 2015-2016 update | Tax Free Savings Accounts | Discussion forum

For those people like me, while paying a mortgage and raising kids, I really do not have $10,000 laying around to invest in TFSA.

For now. For very low income seniors, JT promised a boost in GIS payments during the election.

We will see if he follows through on that promise in the Spring budget. Given the way the deficit is heading, he may have to break a number of promises. So far, he is spending like a drunken sailor.

I suspect that, even for "middle class" seniors, which appears to now be defined as people with taxable incomes approx. 45,000 - 90,000, the recent new measures may be approximately a wash over time.
Such individuals gain on the tax rate reduction of 1.5% but lose on the tax-free $4500 cumulative - which they can almost certainly afford to contribute to if a 2-person household and both have this income, as can many single persons.
The closer you are to the lower end of this bracket, the sooner the break even point will come.
Of course, if we should get to a negative interest environment, all will be moot for many seniors. Little to no fixed income returns mean that both TFSA and Income Tax become less and less relevant.

There is no talk yet, as far as I know, about making the lower income people pay more.
In fact, I heard in the media that Libs want to increase GIS for seniors.

However, there is more than once way to skin a cat. CPI does not reflect the priority expenditures of low income persons, so any income pinned to CPI will not keep up with real costs. Last night's TV news suggested a 4.5% increase in the cost of food, which we all must buy and is a disproportionate burden on low income people, especially where minimum wage does not keep pace. This was blamed on the faltering Cdn$ (which in turn is related to our reliance on oil to run our economy and failure to diversify).

In addition, I fully expect the next budget, as well as provincial and municipal budgets, will do some tweaking so that, while the official tax rate may not go up for the lower income groups per se, there will be other costs that everyone must pay, regardless of income. A simple graduated tax would be more transparent than all the finagling. Politicians often promise a simplified tax system but in the end they never deliver it because they prefer to do the tweaking, hoping we won't notice effective increases.

I thought it was a problem that none of the political parties were talking about lower income earners in the last campaign. It was as if they'd vanished or been disenfranchised. All the parties were targeting the "middle class".

But they didn't do that. Voter turnout, statistically, tends to be lower among low income earners, so I guess the politicians thought it would be more productive to go after the vast "middle class".

I'm counting on the Liberals to forget the youth who elected them... If your in Ontario Kathleen Wynne is next to deal with..