Comments on: Seven Reasons why Retroactive TFSA Room isn’t such a Good Idea

By: Today’s economy media pack – 2009.08.07 | BrighterLife.ca

Today’s economy media pack – 2009.08.07 | BrighterLife.ca — Fri, 16 Dec 2011 15:49:06 +0000

[...] Canadian Capitalist. Seven reasons why retroactive TFSA room isn’t such a good idea. “According to Mr. Hamilton, the move would help Canadians save more in a tax efficient manner to make up for the bear market losses just as defined benefit programs are allowed to boost contributions to make up for a pension plan shortfall. Here’s why I think this isn’t such a great idea after all.” [...]

By: Today’s economy media pack – 2009.08.07 | Today's economy blog

Today’s economy media pack – 2009.08.07 | Today's economy blog — Wed, 23 Dec 2009 19:38:54 +0000

By: boko

boko — Sat, 15 Aug 2009 00:33:43 +0000

one more thing, the TFSA is not that popular as many would like to think, people have no money..we always talk about finances in my circle of friends and not one has a TFSA account..infact, some didnt know anything about it till a few months ago.

By: boko

boko — Sat, 15 Aug 2009 00:30:41 +0000

At 30 I’m all for a retroactive TFSA, I have been fortunate to double my $5k in the last 4 months and would love to dump more money in the TFSA.

By: RR Top 5: In The News Edition(?) | Realizing Retirement

RR Top 5: In The News Edition(?) | Realizing Retirement — Fri, 07 Aug 2009 12:03:51 +0000

[...] Canadian Capitalist articulates more clearly than I, Seven Reasons why Retroactive TFSA Room isn’t such a Good Idea [...]

By: Canadian Personal Finance Blog » Blog Archive » Random Thoughts: Back to Work Edition

Fri, 07 Aug 2009 11:05:21 +0000

[...] Canadian Capitalist points out Seven Reasons Why Retroactive TFSA Rooms Isn’t A Good Idea, I’d still like it, but I can understand his point as [...]

By: Steve

Steve — Fri, 07 Aug 2009 01:13:14 +0000

I fully agree with increasing the yearly limit for TFSAs…$5000 isn’t much. But sweet Christ, haven’t the Boomers and elderly gotten enough already?

By: Henry

Henry — Thu, 06 Aug 2009 22:16:07 +0000

CC: I was confused between 401k and IRA. It is possible to contribute to both 401k (15k limit) and Roth IRA(5k limit).

Roth IRA is identical to TFSA.

401k is similar to RRSP.

You are correct. 401k + Roth IRA is a large contribution room. US and Canada is similar and my previous post is incorrect.

By: Sampson

Sampson — Thu, 06 Aug 2009 16:51:33 +0000

I think its a bad idea. As has been mentioned, it would benefit a minority of Canadians, yet cost the majority (in terms of lost tax dollars to fund the government.

I don’t know what % of Canadians actually have TFSA’s, sure people talk about it, but in the end, I wouldn’t be surprised if most aren’t even taking full advantage of them (much like RRSPs).

We don’t need any additional benefits for wealthy Canadians and further division of socio-economic classes.

By: Canadian Capitalist

Canadian Capitalist — Thu, 06 Aug 2009 16:43:41 +0000

@DH: I have no doubts that younger Canadians *can* benefit from this program. A 35-year old gets $80K in extra contribution room, which isn’t small potatoes really. But the question is: who benefits disproportionately and who pays for the proposal. The answer is it is the relatively wealthier Canadians who benefit and everyone pays (in the form of lost tax revenues). That is not fair at all.

I think saving for a HBP inside a RRSP is a great idea. Don’t forget the RRSP contributions are made with pre-tax dollars, so a home downpayment fund can accumulate much faster with pre-tax dollars. Coupled with TFSA as it is currently implemented, it should be plenty of tax sheltered saving room for most people.

@Henry: I saw your comment on MJ’s blog when I looked up the link. I don’t know much about US retirement savings system but don’t US residents have an opportunity to contribute to 401(k)s? Regardless, I agree with you that we already have plenty of tax sheltered saving room in Canada. In the example where a person earns $50K, between a RRSP and TFSA they can save 28% of their pre-tax income! Anyone saving at that rate is likely to do alright regardless of what the markets are doing.