As you may have already heard, the TFSA dollar limit will be increasing to $6,000 this new year. A popular choice among Canadians, the Tax-Free Savings Account (TFSA) program began in 2009 and is available to those over the age of 18 and who have a valid social insurance number. The name itself is misleading because TFSAs actually operate as an investment account, rather than a savings account.
About TFSA Contribution Limits
TFSAs have contribution limits commonly referred to as contribution room. Your contribution room is based on a yearly limit and these limits are the same for everyone. Contributions aren’t tied to your income, so you don’t need earned income to contribute.
The annual contribution limit for 2018 is $5,500 and contribution room accumulates every year starting from the program’s conception in 2009. For example, if you’ve never previously contributed to a TFSA, you have a total of $57,500 of available room this year — as long as you were over the age of 18 when the program started.
List of Historical Contribution Limits
The annual contribution limit for 2019 is rising to $6,000, up $500 from recent years. Here’s the breakdown of the annual contributions over the past 10 years.
|Year||TFSA Annual Contribution Limit*|
*Historial limits are based on the government of Canada’s website and this Financial Post source.
So take advantage of a TFSA account today, and with the contribution room limit rising in 2019, perhaps there’s no better time to open an account.
To learn more about our most commonly asked questions when it comes to TFSAs, visit this blog post we wrote about What Is A TFSA: The Top 12 Questions Answered. If you’re still evaluating which between an RRSP or a TFSA, check out our post, 3 Questions to Help You Decide Between an RRSP and TFSA. We hope this helps!