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Tax Free Savings Account (TFSA) Limit Raised to $5,500 for 2013

Posted November 29, 2012 @ 5:06pm

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The Government of Canada announced earlier this week that the Tax Free Savings Account (TFSA) contribution limit has been raised to $5,500 for 2013! This isn't exactly a deal, but it's a very important information if you want to get the most out of your money.

If you're not familiar with the Tax Free Savings Account, it enables Canadians to set aside up to ~~$5000~~ $5,500 each year in various savings options and not have to pay tax on the income earned or on withdrawals. You can see this Department of Finance Canada page for some estimates on how much more you could accumulate over time with this contribution limit increase.

What's your reaction to the news? Join the TFSA discussion in our personal finance forum!

Source: The Glove and Mail

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- LarryLat
- Hooray! Now I just need to find the extra $500 in addition to all the $5Ks from previous years
  
  Still, this is great, and I fully expect start using it as much as I can once I pay down all my non-interest-deductible debt.
- rcheung13
- Thanks for the heads up. Guess pension/saving crisis is getting Ottawa jittery.
- FunSave22
- Guess pension/saving crisis is getting Ottawa jittery.
  It has nothing to do with that.
  
  TFSA limits are automatically adjusted due to the inflation rate. The limits are rounded to the nearest $500.
  
  In order to give everyone time to prepare, the use the annual inflation rate at the end October to do their calculations. The October inflation numbers were released on Friday. And using the numbers from Friday, they have released the 2013 limits today.
- 513263337
- Good news!
- DaShaggy
- "HARPER GOVERNMENT " .. lol. Why are they so insecure, since when is the Canadian government, no longer just that? Sigh..
- guessaaa
- "HARPER GOVERNMENT " .. lol. Why are they so insecure, since when is the Canadian government, no longer just that? Sigh..
  Every government does this.
- samm
- So what's the total limit by the end of 2013?
- aTywin
- So what's the total limit by the end of 2013?
  Depends on your age. If you were 18 or older when the TFSA was first brought in 5 years ago, then your total limit would be 4Ãâ$5000 + 1Ãâ$5500 = $25,500.
- angel_wing0
- Great news indeed!
- manmanny
- It was supposed to be raised to 10,000/-. right?
  But this is not bad. I like TFSA compared to RRSP.
- aTywin
- It was supposed to be raised to 10,000/-. right?.
  Nope, never heard that.. I've always believed it to be tied to inflation.
  
  But this is not bad. I like TFSA compared to RRSP.
  Both are good for different applications; Best bet is to max out both.
- FunSave22
- It was supposed to be raised to 10,000/-. right?
  Harper promised to double the amount once the deficit was eliminated.
  
  When he made that promise he claimed the deficit would be eliminated during the 2015-16 fiscal year. Now he is saying it will be later.
  
  Don't hold your breath.
- angel_wing0
- It was supposed to be raised to 10,000/-. right?
  ...no, unless inflation is THAT bad here.
- Sanyo
- Have a feeling this is going to start throwing off tons of people with calculations. its good news, but those not financially literate are going to be so confused lol.
- blainehamilton
- Depends on your age. If you were 18 or older when the TFSA was first brought in 5 years ago, then your total limit would be 4Ãâ$5000 + 1Ãâ$5500 = $25,500.
  
  Wow. Got some catching up to do...
- manmanny
- ...no, unless inflation is THAT bad here.
  Oh found it here.
  
  During the 2011 election, the Conservative platform pledged to double the annual contribution limit for TFSAs to $10,000 per year, but this promise will not be kept until after the budget is balanced, according to the Conservatives' 2011 election platform.
- Kaitlyn
- Really good news! Looking forward to throwing the extra $500 into my TFSA!
  
  Maybe that will help alleviate some of the aggressive moves I made years ago that kind of killed my TFSA balance
- actng
- you guys realize the extra $500 was planned from the get go right?
  
  in fact there is a roadmap since day one as to what the TFSA limits will be for each year.
- Kaitlyn
- you guys realize the extra $500 was planned from the get go right?
  
  in fact there is a roadmap since day one as to what the TFSA limits will be for each year.
  Don't rain on our parade!
  
  It's still welcome change when we're basically used to $5k/year...
- lhsonic
- Have a feeling this is going to start throwing off tons of people with calculations. its good news, but those not financially literate are going to be so confused lol.
  I built a spreadsheet for myself just for this purpose..
  
  Try it out!
  
  http://lorenha.com/downloads/share/
- Sanyo
- I built a spreadsheet for myself just for this purpose..
  
  Try it out!
  
  http://lorenha.com/downloads/share/
  Thanks man! Nice tool to have.
- manmanny
- Have a feeling this is going to start throwing off tons of people with calculations. its good news, but those not financially literate are going to be so confused lol.
  you guys realize the extra $500 was planned from the get go right?
  
  in fact there is a roadmap since day one as to what the TFSA limits will be for each year.
  No. Not $500.
  
  Have a feeling this is going to start throwing off tons of people with calculations. its good news, but those not financially literate are going to be so confused lol.
  If for $500 gets them confused then they deserve it.
  
  I built a spreadsheet for myself just for this purpose..
  
  Try it out!
  
  http://lorenha.com/downloads/share/
  Wow you need a spreadsheet for this?
- DrAcX
- It was supposed to be raised to 10,000/-. right?
  Yes, that's what they promised. Except the condition for that promise is when Canada no longer has debt, and our gov't is rolling in excess funds.
  
  However I am still glad they are giving the contribution limit an unexpected boost.
- ilusa
- nice!
- red_skittles
- Wow you need a spreadsheet for this?
  If you aren't making a lump sum $5000 contribution every year how else are you going to keep track of your contributions. And once you start making withdrawals it gets even harder to keep track of.