Last week our government introduced Economic Action Plan 2015. One of the key measures included in this year’s budget was an increase to the maximum annual contribution limit in the Tax Free Savings Account. The maximum Canadians can contribute to the TFSA was increased from $5,500 to $10,000 effective this taxation year.
There has been much confusion and misinformation circulating about what segment of the population uses the TFSA. An incorrect fact emanating from the Opposition benches suggest that only the rich are taking advantage of the TFSA. Nothing could be further from the truth.
Here are the facts: 600,000 seniors (65+) with income below $60,000 are currently maximizing their TFSA contributions and will benefit from the measure. As a matter of fact in 2013, 75% of all Tax Free Savings Account holders earned less than $70,000.
Many seniors are using the TFSA and they are not all rich. Nearly 700,000 seniors earning less than $22,000 have a Tax Free Savings Account. Actually a review of all Canadians currently enrolled in a TFSA indicates half of all Tax Free Savings Account holders earn less than $42,000 a year.
Young people are saving for a down payment on a first home. Parents are using their TFSA to save for their children’s education. Others are using their TFSA as a vehicle to put money aside for their retirement.
I am very pleased our Conservative Government listened to those constituents who suggested we increase the TFSA limits and included the change in this year’s budget. Although it may not be for everyone, I strongly suggest constituents take a serious look at the TFSA as a tax free way to save some of their hard earned money.
MP, Stormont-Dundas-South Glengarry