TFSA 2015-2016 update | Page 3 | Tax Free Savings Accounts | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

No permission to create posts
sp_Feed Topic RSS sp_TopicIcon
TFSA 2015-2016 update
December 25, 2015
10:12 pm
Loonie
Member
Members
Forum Posts: 5415
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

I think I actually have 2.5 suggestions!

The other half-suggestion that I would add is a reminder that in most FI's you can divide up your investment into smaller parcels. Thus, if you had, for example, $10,000 that you wanted to have for "emergency" or in 1-yr GICs of some sort, you could divide it into 5 x $2000, or 1 x $5000 plus 1 x $3000 plus 2 x $1000, etc. This gives you some flexibility, if you should need the cash, to just cash in a portion and leave the rest to collect the full rate of interest. Just be sure that you are dealing with an institution that offers a TFSA savings account so that, if you should ever decide to transfer, you can dump it all into one account first and pay only one transfer fee. And never trust institutions that don't have transfer-out fees. My experience is that, eventually, they all introduce them, if you wait long enough, and then they gradually increase them.

December 27, 2015
9:39 am
kanaka
Member
Members
Forum Posts: 1232
Member Since:
December 23, 2011
sp_UserOfflineSmall Offline


Kanaka..
Any possibility of you sharing your excel template (without your data, of course)?

Download this and give it a try...... https://drive.google.com/file/d/0Bz7KXgK2ZCQ9ZTBuUDliVXBPUDQ/view?usp=sharing

December 28, 2015
4:52 am
xxxx
Member
Banned
Forum Posts: 338
Member Since:
June 29, 2013
sp_UserOfflineSmall Offline

Manulife Bank Promo 3% for 6 months Dec 1 to May 31 on TFSA and RRSP Daily Interest Accounts (up to $2 million limit!)
Manulife Bank’s Tax-Free and Registered Advantage Account Interest Offer of 3.00% (the “Offer”) is available to Manulife Bank’s Tax-Free Advantage Accounts and Registered Advantage Accounts (“Eligible Accounts”).
Manulife Bank’s Tax-Free and Registered Advantage Account Interest Offer of 3.00% (“Promotional Interest”) is made up of the regular posted variable annual interest rate of 1.00% (“Regular Rate”) and the variable annual promotional rate of 2.00% (“Promotional Rate”). Any change to the Regular Rate will result in a corresponding change to the Promotional Interest.
If you would like to take advantage of this offer and are not already the owner of an Eligible Account, Manulife Bank must receive and accept your application for an Eligible Account by March 15, 2016. Eligible Account holders can take advantage of this Offer by making a deposit to their Eligible Account from December 1, 2015 to March 15, 2016 (“Eligible Deposit Period”).
Subject to the limits and qualifications outlined in these Terms and Conditions, Promotional Interest will be paid on net new deposits (“Eligible Deposits”) received in an Eligible Account during the Eligible Deposit Period. Eligible Deposits will receive Promotional Interest from December 1, 2015 to May 31, 2016 (the “Promotional Period”)
Manulife Bank’s posted deposit rates are effective for deposit amounts of up to $2 million

December 28, 2015
1:29 pm
Rick
Member
Members
Forum Posts: 824
Member Since:
February 17, 2013
sp_UserOfflineSmall Offline

kanaka said


Kanaka..
Any possibility of you sharing your excel template (without your data, of course)?

Download this and give it a try...... https://drive.google.com/file/d/0Bz7KXgK2ZCQ9ZTBuUDliVXBPUDQ/view?usp=sharing

Kanaka... Wow..that's some spreadsheet. Little too involved for my simple mind. Not really familiar with Google Sheet, so I tried uploading the template from my ancient Office 2000 Excel program and it uploaded and converted quite nicely. Filled in the first line as an example. Didn't really follow your formula for compounded interest, I used the FV formula in Excel and made the appropriate modifications so that any changes to rate, term or amount would automatically calculate new data. Not nearly as fancy as yours, but give it a look and LMK what you think or if you have any suggestions for additional data. It is just a template so it can be downloaded and modified if you wish.

https://docs.google.com/spreadsheets/d/1rsAi-ZPQwEo9l7LykB0cFJSSaI2-kRGjPqBkpqz6w-A/edit?usp=sharing

December 28, 2015
6:18 pm
kanaka
Member
Members
Forum Posts: 1232
Member Since:
December 23, 2011
sp_UserOfflineSmall Offline

Rick said

kanaka said


Kanaka..
Any possibility of you sharing your excel template (without your data, of course)?

Download this and give it a try...... https://drive.google.com/file/d/0Bz7KXgK2ZCQ9ZTBuUDliVXBPUDQ/view?usp=sharing

Kanaka... Wow..that's some spreadsheet. Little too involved for my simple mind. Not really familiar with Google Sheet, so I tried uploading the template from my ancient Office 2000 Excel program and it uploaded and converted quite nicely. Filled in the first line as an example. Didn't really follow your formula for compounded interest, I used the FV formula in Excel and made the appropriate modifications so that any changes to rate, term or amount would automatically calculate new data. Not nearly as fancy as yours, but give it a look and LMK what you think or if you have any suggestions for additional data. It is just a template so it can be downloaded and modified if you wish.

https://docs.google.com/spreadsheets/d/1rsAi-ZPQwEo9l7LykB0cFJSSaI2-kRGjPqBkpqz6w-A/edit?usp=sharing

sf-surprised Hi. Columns S to W are no longer used. This is an extract of a much larger and comprehensive excel program that has evolved and been added to over the years. And the formulas in column K works perfectly. And the 5 year laddering report works well too.

Yours works well...but does it have a 5 year laddering report?

January 2, 2016
9:45 pm
Loonie
Member
Members
Forum Posts: 5415
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

Informative article on decreased TFSA room versus "middle class" tax cut:
http://www.theglobeandmail.com.....e27941321/

January 3, 2016
8:39 am
Bill
Member
Members
Forum Posts: 1415
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

Loonie, the Globe writer chooses to compare only the head-to-head effects of two unrelated tax changes made by the Liberals. In fact there were other changes - for example, benefits for families with children, cancelling income splitting. So to me the article is not really useful as only a selective and partial look, not the overall picture, of the effects of the Liberal tax changes is presented.

January 3, 2016
3:42 pm
kanaka
Member
Members
Forum Posts: 1232
Member Since:
December 23, 2011
sp_UserOfflineSmall Offline

Still talking TFSA but changing course a bit.

Both my wife and I have TFSA's to the limit. We are both beneficiaries to each other for the TFSA accounts.

So here is the scenario.

As of 2016 we will both have $46,500 contributed.

I pass away and the dust settles and now all my TFSA's are in my wife's name. While my wife would continue to be allowed to contribute as per the allotted limits. Would my wife have any issues with withdrawing any of my ex $46,500 and re-contribute the withdrawn amount the next year (over and above her allotted limit)? In other words is that $46,500 added to her "TFSA contribution room" for the rest of her life?

January 3, 2016
4:13 pm
kanaka
Member
Members
Forum Posts: 1232
Member Since:
December 23, 2011
sp_UserOfflineSmall Offline

kanaka said

Still talking TFSA but changing course a bit.

Both my wife and I have TFSA's to the limit. We are both beneficiaries to each other for the TFSA accounts.

So here is the scenario.

As of 2016 we will both have $46,500 contributed.

I pass away and the dust settles and now all my TFSA's are in my wife's name. While my wife would continue to be allowed to contribute as per the allotted limits. Would my wife have any issues with withdrawing any of my ex $46,500 and re-contribute the withdrawn amount the next year (over and above her allotted limit)? In other words is that $46,500 added to her "TFSA contribution room" for the rest of her life?

I should say we are successors to each other's accounts. I think every one should check that......is your spouse a successor or beneficiary to your TFSA accounts.

January 3, 2016
6:13 pm
Bill
Member
Members
Forum Posts: 1415
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

kanaka, here's a link that will help:
http://www.cra-arc.gc.ca/tx/nd.....u-eng.html

There's more detail at the link I gave you but essentially I believe the short answer to your questions is that your spouse can withdraw and recontribute (in following years) anything that's in your TFSA if she decides to maintain it as a separate TFSA, i.e. not consolidate it with her own. Alternatively, if she consolidates it with her own TFSA, then the usual rules apply to whatever's in her TFSA. (There are no "lifetime limits" re withdrawals and recontributions.) Going forward, she has her annual $5500 limit which she can allocate as she wishes if she decides to continue with two TFSAs going forward. So it's common sense, nothing convoluted.
P.S. It's not the $46.5K that you've contributed that we're subsequently talking about, it's whatever the balance is in your TFSA at the time of your (unfortunate) demise.

January 3, 2016
6:30 pm
Loonie
Member
Members
Forum Posts: 5415
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

Bill said

Loonie, the Globe writer chooses to compare only the head-to-head effects of two unrelated tax changes made by the Liberals. In fact there were other changes - for example, benefits for families with children, cancelling income splitting. So to me the article is not really useful as only a selective and partial look, not the overall picture, of the effects of the Liberal tax changes is presented.

As I read it, the author is discussing the outcomes of two measures which the current govt has actually implemented and which have been widely discussed, often in the absence of data, as helping or hindering. I find it useful to see the TFSA reduction in this broader context.

I am not familiar with benefits for families with children, as I have no young children.

The only income spitting measures that have been put into effect are pension income splitting, spousal RSPs, loans to spouses etc., none of which have been disturbed, nor have I heard of any intention to do so by the current govt.

Perhaps you were thinking of the Conservative proposal to have income splitting for pre-retirement couples with children. As I recall, this was intended for when the budget was finally balanced, which has not really happened and is not likely to happen any time soon. They had it in their 2011 campaign, but never did it because they couldn't afford to do it, quite understandable. Still can't. No change.

January 3, 2016
6:37 pm
Loonie
Member
Members
Forum Posts: 5415
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

I agree with Bill re: kanaka's TFSA. But we would miss him!sf-cry

January 3, 2016
8:13 pm
Norman1
Member
Members
Forum Posts: 2492
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

I looked at Bill's CRA link and didn't come to exactly the same conclusions.

This is from CRA: TFSA > Life events > Death of a TFSA holder > Successor holder:

If named as the successor holder, the survivor will become the new holder of the TFSA immediately upon the death of the original holder. ....

This is the case for all three types of TFSA: deposit, annuity contract, and trust arrangement.

The deceased holder is not considered to have received an amount from the TFSA at the time of death if the holder named his or her survivor as the successor holder of the TFSA. In this situation, the TFSA continues to exist and the successor holder assumes ownership of the TFSA contract and all of its contents. However, where the TFSA contract is a trust arrangement, the trust continues to be the legal owner of the property held in the TFSA.

The TFSA continues to exist and both its value at the date of the original holder's death and any income earned after that date continue to be sheltered from tax under the new successor holder.

Except in cases where an excess TFSA amount existed in the deceased holder's TFSA at the time of their death, the successor holder's unused TFSA contribution room is unaffected by their having assumed ownership of the deceased holder's account.

The issuer will notify the CRA of this change in ownership.

The successor holder, after taking over ownership of the deceased holder's TFSA, can make tax-free withdrawals from that account. The successor holder can also make new contributions to that account, subject to their own unused TFSA contribution room.

If the successor holder already had their own TFSA, then they would be considered as the holder of two separate accounts. If they wish, they can directly transfer part or all of the value from one to the other (for example, to consolidate accounts). This would be considered as a qualifying transfer and would not affect available TFSA contribution room.

I think kanaka's wife would have no issues with withdrawing from any of his TFSA's, once she becomes their new holder, and re-contributing the withdrawn amount the next year to any TFSA she is the holder of.

I also think that there would be no change to her TFSA contribution room unless kanaka has overcontributed to his TFSA's.

January 4, 2016
5:23 am
Bill
Member
Members
Forum Posts: 1415
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

Norman1, though it very likely may be allowed, in your excerpt I can't see where it says she can withdraw from kanaka's TFSA and recontribute to her TFSA the next year - ? The last sentence says she can do a direct transfer from one to the other, which is what most people would likely do, i.e. consolidate the two into one TFSA going forward.

January 4, 2016
10:34 am
kanaka
Member
Members
Forum Posts: 1232
Member Since:
December 23, 2011
sp_UserOfflineSmall Offline

Bill said
There are no "lifetime limits" re withdrawals and recontribution.

Perhaps I did not word properly but "as of this year" the lifetime limit of a person of my age is $46,500 and each year that limit increases. And the ins, outs and reinvestments cannot exceed the limit when investing within the rules of the plan.

January 4, 2016
4:05 pm
Winnie
Ontario
Member
Members
Forum Posts: 193
Member Since:
December 7, 2011
sp_UserOfflineSmall Offline

kanaka said

Bill said
There are no "lifetime limits" re withdrawals and recontribution.

Perhaps I did not word properly but "as of this year" the lifetime limit of a person of my age is $46,500 and each year that limit increases. And the ins, outs and reinvestments cannot exceed the limit when investing within the rules of the plan.

Yes, the lifetime limit is $46,500 including 2016 $5,500, but the ins, outs and reinvestments can be more. For example, in my case, I can do ins, outs and reinvestments up to $50,650 right now because, I earned interest $4,150 before Jan 01, 2016.

January 4, 2016
4:25 pm
Bill
Member
Members
Forum Posts: 1415
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

I believe if you go into your account via My Account on CRA site you can access your TFSA history of contributions, limits, etc., though it's often not completely up to date as the institutions don't have to report to CRA until some time after year-end.

January 4, 2016
5:30 pm
Norman1
Member
Members
Forum Posts: 2492
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Bill said

Norman1, though it very likely may be allowed, in your excerpt I can't see where it says she can withdraw from kanaka's TFSA and recontribute to her TFSA the next year - ? The last sentence says she can do a direct transfer from one to the other, which is what most people would likely do, i.e. consolidate the two into one TFSA going forward.

I think that's implied by the statement that she would become the holder of kanaka's TFSA. The TFSA will actually become one of her TFSA's.

Being the holder, she would be able to make tax-free withdrawals from that TFSA.

I didn't find anything that distinguishes between (a) the TFSA accounts that one is the holder of and had contributed to and (b) the TFSA accounts that one is now the holder of as the result of being the successor.

To me, it looks like withdrawals from (b) are treated the same way as withdrawals from (a). The amount withdrawn will be added to the holder's TFSA contribution room the following year.

January 4, 2016
6:55 pm
Norman1
Member
Members
Forum Posts: 2492
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

kanaka said

Bill said
There are no "lifetime limits" re withdrawals and recontribution.

Perhaps I did not word properly but "as of this year" the lifetime limit of a person of my age is $46,500 and each year that limit increases. And the ins, outs and reinvestments cannot exceed the limit when investing within the rules of the plan.

It can actually better than that. The TFSA contribution room amount given out each year by the Income Tax Act is just a starting point.

If I had contributed $20,000 of my $46,500 unused TFSA contribution room, I would have $26,500 room left. If that $20,000 in the TFSA became $50,000 and I withdrew it this year, then next year I would have

  • the $26,500, plus
  • the $5,500 given out each year by the Income Tax Act, plus
  • $50,000 as the result of the withdrawal.

A total of $82,000 of unused contribution room.

January 4, 2016
7:06 pm
kanaka
Member
Members
Forum Posts: 1232
Member Since:
December 23, 2011
sp_UserOfflineSmall Offline

Winnie said

kanaka said

Bill said
There are no "lifetime limits" re withdrawals and recontribution.

Perhaps I did not word properly but "as of this year" the lifetime limit of a person of my age is $46,500 and each year that limit increases. And the ins, outs and reinvestments cannot exceed the limit when investing within the rules of the plan.

Yes, the lifetime limit is $46,500 including 2016 $5,500, but the ins, outs and reinvestments can be more. For example, in my case, I can do ins, outs and reinvestments up to $50,650 right now because, I earned interest $4,150 before Jan 01, 2016.

Winnie and Norman1. Absolutely correct! I knew that but did not put that into my example.

So to restate my mock up example.
Both my wife and I have $46,500 plus interest and with no withdrawals.

And I would assume if we were not fully contributed or had not topped up withdrawals from previous years the amount for my wife would be what is in the registered plan and not what entitlement I had left to contribute.

So the life time limit is $46,500 plus any withdrawal including interest.

No permission to create posts

Please write your comments in the forum.