Did you know that nearly 60% of Canadians have a Tax-Free Savings Account (TFSA)? This makes it one of the most popular ways to save and invest in the country! It’s like a financial best friend that lets your money grow without the worry of taxes eating away at your gains. Whether you’re saving for a vacation, a down payment, or just building a nest egg, the TFSA offers the flexibility to grow your funds tax-free. But here’s a surprising stat: almost half of TFSA holders aren’t maxing out their contributions each year! With the annual limit now at $7,000 for 2024, that’s a lot of missed opportunity for tax-free growth.
So, if you’re looking to get the most out of your savings, maxing out your TFSA could be a smart move to make the most of that valuable contribution room. Why the TFSA is the best Using a TFSA to create passive income is like having your cake and eating it, too, tax-free! By investing in dividend-paying stocks or other income-generating assets within your TFSA, you can build a steady stream of income without worrying about the taxman taking a bite. Whether you’re reinvesting those dividends to grow your portfolio or using them as extra cash flow, the beauty of a TFSA is that all the income earned stays completely tax-free.
But before you dive in, there are a few things to consider. First, remember that while the TFSA is super flexible, you still want to choose investments that align with your risk tolerance. Dividend stocks, real estate investment.