It’s time to contribute to your tax free savings account (TFSA). The limit for 2017 is $5,500 plus any left over contribution room from prior years plus any withdrawals you made in prior years.
A lot of people don’t realize it, but a TFSA can be invested in the same things an RRSP can be invested in. And, if you have your funds in a TFSA for the long haul, they should be invested the same way as your RRSP. A lot of people think that the TFSA money has to be in a savings account and so they have up to $50,000+ sitting there earning a fraction of a percent in interest each year. And the banks like their clients to think that. It’s a good deal – for the banks, that is. This is one really good example of how a fee-only financial advisor can help. The bank will be looking after your best interest, they will be looking after their own. The fee only financial advisor’s best interest is to give the best possible advice in the client’s best interest.
Of course, TFSAs can be used for many things and weren’t really intended for retirement purposes. If you’re planning on accessing the funds in the short term, keep it liquid (but you can probably still do better than a savings account). But if you’re keeping the funds in your TFSA for the long term, invest the funds for the long term.