TFSA 2014

Preparing for life after work. RRSPs, RRIFs, TFSAs, annuities and meeting future financial and psychological needs.
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optionable68
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Re: TFSA 2014

Post by optionable68 »

Springbok wrote:So next step, is to rearrange our TFSA holdings so that they still have reasonable yield while being liquid. Go with high yielding fund rather than individual securities
Springbok, I don't get this statement. Why would you be looking specifically for yield in a TFSA? Its total return in this sheltered account so doesn't that make any distributions irrelevant? Or have I missed something?
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Springbok
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Re: TFSA 2014

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optionable68 wrote:
Springbok wrote:So next step, is to rearrange our TFSA holdings so that they still have reasonable yield while being liquid. Go with high yielding fund rather than individual securities
Springbok, I don't get this statement. Why would you be looking specifically for yield in a TFSA? Its total return in this sheltered account so doesn't that make any distributions irrelevant? Or have I missed something?
We will be drawing 50% of the TFSA during the coming year. For that part, the total return of the chosen fund will hopefully not be much different than the distribution yield.
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Re: TFSA 2014

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Springbok wrote:
optionable68 wrote:
Springbok wrote:So next step, is to rearrange our TFSA holdings so that they still have reasonable yield while being liquid. Go with high yielding fund rather than individual securities
Springbok, I don't get this statement. Why would you be looking specifically for yield in a TFSA? Its total return in this sheltered account so doesn't that make any distributions irrelevant? Or have I missed something?
We will be drawing 50% of the TFSA during the coming year. For that part, the total return of the chosen fund will hopefully not be much different than the distribution yield.
You lost me. :?
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Re: TFSA 2014

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optionable68 wrote:
You lost me. :?

Oh well - Not important.
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Koogie
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Re: TFSA 2014

Post by Koogie »

Slid another years worth of TFSA payments into the Peoples Trust TFSA HISA. Hopefully despite their recent digital problems, they'll continue to be one of the few that rewards us savers.
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Re: TFSA 2014

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poedin wrote: This year we opened BMOIL-TFSAs with the intent of consolidating the maturing GICs with new deposits for the next five+ years. Although we may not get the best rates, the options available are fairly competitive without accumulating a bunch of TFSAs.
Accounts up and running within minutes - helpful to be existing BMO clents and being able to fund directly into TFSAs. Best rate for a 5 year is via Presidents Choice Bank (CIBC?) 2.82%. PT's TFSA eSA of 3% was tempting, but it doesn't suit our requirements (GIC ladder) and their 5 year has been hovering at 2.6% for almost a year.
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Re: TFSA 2014

Post by queerasmoi »

I did not notice the PT TFSA is 3% vs regular 1.8%. Perhaps then it would make sense while I am not investing, to slide my emergency fund into there.
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adrian2
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Re: TFSA 2014

Post by adrian2 »

queerasmoi wrote:I did not notice the PT TFSA is 3% vs regular 1.8%.
And it's been like that for years and years, not a transient promo.
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Re: TFSA 2014

Post by gsp_ »

adrian2 wrote:
queerasmoi wrote:I did not notice the PT TFSA is 3% vs regular 1.8%.
And it's been like that for years and years, not a transient promo.
Bored so I looked it up, was bugging me that I couldn't remember when it was introduced. It was launched in February of 2010, rate has not budged since.
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Re: TFSA 2014

Post by queerasmoi »

Good to know. Until know I had always ignored TFSA HISAs because I always had remaining non-reg investments to push into my TFSA room. Then last year I was making enough money to use TFSA for new contributions. Now that neither is the case, I should look at that HISA.
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Re: TFSA 2014

Post by j831robert »

Yesterday and today were TFSA Top Up Days for us - madame's with PPL and mine with IPL (as usual from the start). Total market value currently $130.5K (you can do the math). Like "Topsie" they'se jest keeps growin! - a fun game while it lasts !
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Re: TFSA 2014

Post by Springbok »

j831robert wrote:Yesterday and today were TFSA Top Up Days for us - madame's with PPL and mine with IPL (as usual from the start). Total market value currently $130.5K (you can do the math). Like "Topsie" they'se jest keeps growin! - a fun game while it lasts !
We have some PPL and some IPL in our TFSAs. They have a good run and yields ain't what they used to be. Both accounts also have SIN.UN which does have a good yield, but not much unit price potential because of the REITs within the fund. IP{L and PPL were not part of SIN last time I checked.

I am still on the fence looking at $27k in cash in TFSAs looking for a home. I was going to use this to pay taxes, but found some other cash to use for that.
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Re: TFSA 2014

Post by BRIAN5000 »

I am still on the fence looking at $27k in cash in TFSAs looking for a home.
I am aslo looking for something for TFSA, something simple, I like CBD but no volume and Mer is kinda high. I may just close my eyes and go with VDY.
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Re: TFSA 2014

Post by j831robert »

Springbok et al: My all IPL has a 5 yr Composite RR of 36.14 return while wife's almost all PPL (a little bit of DR added last year) I have had DRIP'd since 2012 which, on average has added 5 units a month but contributes to her 5 yr Comp RR of 29.7% rather than charging ahead of mine. I ain't complainin' anyway! They are sort of our 'couch potato' investments - buy 'em and leave 'em.
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Re: TFSA 2014

Post by BRIAN5000 »

I suspect that what Brian5000 has in mind is this.

Give your spouse $5000 (or $5500) to deposit in his/her TFSA. Spouse withdraws the money tax-free, creating new contribution room the next year. The following year year give your spouse $10,000 (or $11,000) to contribute, for the current year and the contribution room created by the withdrawal. Rinse and repeat. You have a growing stream of money coming out in your spouse's hands.

But then there's GAAR.....

George
wouldn't the income attribution rules come into play?

•Funds can be given to a spouse or common-law partner for them to invest in their TFSA. http://www.tfsa.gc.ca/


Another question - I'm not in this position but want to make sure I understand the rules correctly.

My wife makes maximum contributions to her TFSA $31,000, money grows to $40,000 and Dec 15 2014 she withdraws all of it. How much can she recontribute/contribute in 2015?

$40,000 plus her 2015 contribution room $5500 if contribution level stays the same OR $36500?


http://www.cra-arc.gc.ca/tx/ndvdls/tpcs ... scntrbtnrm

How your TFSA contribution room is determined

The TFSA dollar limit is indexed based on the inflation rate. The indexed amount will be rounded to the nearest $500.

The TFSA contribution room is made up of:
•your TFSA dollar limit plus indexation, if applicable;
•any unused TFSA contribution room from the previous year; and
•any withdrawals made from the TFSA in the previous year.
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Norbert Schlenker
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Re: TFSA 2014

Post by Norbert Schlenker »

Her contribution room is $45,500. But there's no need to go through this withdrawal/contribution two-step every year. Once it's in the TFSA, it's her money.
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Re: TFSA 2014

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Norbert Schlenker wrote:Her contribution room is $45,500. But there's no need to go through this withdrawal/contribution two-step every year. Once it's in the TFSA, it's her money.
To make more of my money her money needs the 2 step process.....did it once not sure if we will do it again.
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Norbert Schlenker
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Re: TFSA 2014

Post by Norbert Schlenker »

Hold on. Let's start from zero and think it through.

Your wife has no TFSA. She has contribution room of X. You put X into her TFSA. It's now her money and the attribution rules do not apply.

Come December 15, the account is worth Y, and she has two options.

1. Do nothing. On January 15 the following year, you put another $5500 into her TFSA. Now she has Y+5500 in her TFSA and it's her money. Nothing it earns gets attributed to you, inside the TFSA or out.

2. Pull Y out of the TFSA. She invests in a taxable account for a month, just as it was invested in the TFSA. On January 15, she puts Y back into the TFSA and you kick in another $5500. Ignoring what was earned in the taxable account for the month (and it would have been earned in the TFSA in scenario 1, so it's not very different), now she has Y+5500 in her TFSA and it's her money. Nothing it earns gets attributed to you, inside the TFSA or out.

There is no material difference between #1 and #2. You don't make "more of my money her money" either way.
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Re: TFSA 2014

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Norbert Schlenker wrote:2. Pull Y out of the TFSA. She invests in a taxable account for a month, just as it was invested in the TFSA. On January 15, she puts Y back into the TFSA and you kick in another $5500. Ignoring what was earned in the taxable account for the month (and it would have been earned in the TFSA in scenario 1, so it's not very different), now she has Y+5500 in her TFSA and it's her money. Nothing it earns gets attributed to you, inside the TFSA or out.
That is not what I think Brian was saying. She pulls Y out of the TFSA and invests it in a taxable account. Next year Brian puts in Y+$5500 to get her TFSA back up to what she is entitled. I don't believe that can be done..... i.e. only the incremental part you have described.
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Norbert Schlenker
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Re: TFSA 2014

Post by Norbert Schlenker »

Oh! That's a very clever idea. And I don't think anything in the rules as they stand prevents this. It allows putting another $31k (and climbing) per year into the lower net worth spouse's hands, avoiding attribution all the while. It's a little "too good to be true", so in five years when the cumulative limit is up to $50k and you can move that amount every year, it's probably going to be so common a dodge that Finance will have to change the rules.
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Re: TFSA 2014

Post by AltaRed »

It is clever but I'd want to examine the rules with a fine comb before trying that.
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Re: TFSA 2014

Post by BRIAN5000 »

Yes I was thinking about what AltaRed is saying getting the whole new $45,000 into her hands, not my idea was someone on here. Those anti avoidance rules cover just about evreything even correctly done legal allowed transactions could be disallowed depending on which way the wind is/was blowing. Don't need to many $45-$50k transactions to make a dent.
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Re: TFSA 2014

Post by freedom_2008 »

The idea is clever if it is allowed. Maybe it is another income-split loophole unintentionally given by the government?

Somehow I felt that I could hear blonde speaking : "STUDY the SYSTEM, Folks!!! ... It is ALL about MONEY...MEGA-MONEY!!! " :lol:
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Re: TFSA 2014

Post by AltaRed »

I'd suggest someone read all the fine print before trying this at home. I would not like to tangle with CRA, especially on registered accounts.
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Re: TFSA 2014

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Even if CRA allow it now unwillingly, I am sure that the government will change it as soon as they are made aware. :wink:
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