TFSA Balance

[big dogie]

Well it's been a year for the TFSA so how did you do? Investing very conservatively mine is at $8900. I'm sure some of you have done very well so who's is bigger?

bd

[blackrock13]

Well it's been a year for the TFSA so how did you do? Investing very conservatively mine is at $8900. I'm sure some of you have done very well so who's is bigger?

bd

Not interested one bit in the TSFA. Too small, too slow and too conservative, especially with my profile.

[stang]

I did open and max mine out a year ago.
But then I withdrew it and invested in the market.
At least I can now deposit 10000 this year if I choose.

[danmand]

Well it's been a year for the TFSA so how did you do? Investing very conservatively mine is at $8900. I'm sure some of you have done very well so who's is bigger?

bd
Well done, mine is only $7,500

[1andun]

I did open and max mine out a year ago.
But then I withdrew it and invested in the market.
At least I can now deposit 10000 this year if I choose.

Dont quite understand your rationale . The whole purpose of a TFSA is you can invest in anything and the capital gains are tax free.If you withdrew the money and invested it into the maket then any capital gains are taxable.

[JaguarTO]

Well it's been a year for the TFSA so how did you do? Investing very conservatively mine is at $8900. I'm sure some of you have done very well so who's is bigger?

bd

Very good level of return on $5,000, you should be pleased with a 78% ARR. In my trading accout I was at 59% for 2009. I just put my TSFA money in a GIC and ignored it. I always do my trading in a margined account with FX, options, futures etc. Too complicated for a TSFA.

[hinz]

Dont quite understand your rationale . The whole purpose of a TFSA is you can invest in anything and the capital gains are tax free.If you withdrew the money and invested it into the maket then any capital gains are taxable.

Maybe the TFSA is a "high-interest" savings account, not TFSA at self-directed discount brokerage :rolleyes:

[hinz]

Maxed out all my TFSA and invested in Teck Resources.....:rolleyes:

Too bad I was chicken since you could not claim capital loss in TFSA if I fu*ked up. Still, invested everything conservatively back in early Mar, 09, I manage to double, including the dividends received.

The opportunity cost is you get hooked on maxing out TFSA & RRSP, instead of hobbying more often to your favourite ladies.

[studebone]

I opened one last year and it got me $8500 tax free! Looking back, I just have been a lot less conservative.
The contribution id small (5000 each year), but it give you a good opportunity to invest in riskier assets without paying a lot of capital gains taxes.
It's definitely worth a try.
If you do your tax planning right, you can just use your tax refund to contribute to your TFSA

[studebone]

Dont quite understand your rationale . The whole purpose of a TFSA is you can invest in anything and the capital gains are tax free.If you withdrew the money and invested it into the maket then any capital gains are taxable.

This brochure m,ight help you undesrtand TFSAs better.
But I think they are ideal for stocks not mutual funds - just 2 cents :)

http://www.fidelity.ca/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1251232655133&ssbinary=true

[SoulPancake]

i maxed out my TFSA already. and i was looking to trade. but i was actually planning on trading in the US stock market then i found out that ...like ur RRSP, it can only have Canadian holdings...can anyone confirm?

[21pro]

i wonder how many have used the tfsa to move money out of Turks & Caicos? that's what it works best for...

[wet_suit_one]

i maxed out my TFSA already. and i was looking to trade. but i was actually planning on trading in the US stock market then i found out that ...like ur RRSP, it can only have Canadian holdings...can anyone confirm?

You're simply wrong.

See here: http://www.taxtips.ca/rrsp/qualifiedinvestments.htm

[SoulPancake]

You're simply wrong.

See here: http://www.taxtips.ca/rrsp/qualifiedinvestments.htm

i appreciate ur research. my original plan was if u had read my other treads was to transfer my maxed TFSA to Questrade and invest in the US Markets. I was actually speaking with my aunt...which i should have probably still done more research which i am, said that it wasnt possible. I guess she was wrong. thx wet_suit_one for ur help :)

[wet_suit_one]

Not interested one bit in the TSFA. Too small, too slow and too conservative, especially with my profile.

Small yes. Slow, it's only as slow as the investments you choose. Same thing applies with conservativism. But definitely small.

[danmand]

Not interested one bit in the TSFA. Too small, too slow and too conservative, especially with my profile.

It is not the TFSA that is too small, it is you that is too big.

[hinz]

i appreciate ur research. my original plan was if u had read my other treads was to transfer my maxed TFSA to Questrade and invest in the US Markets.

Keep in mind though like RRSP, you cannot claim capital loss in both TFSA and RRSP when you screw up your stock pick. You could claim captial loss in non-registered account when your bet doesn't work out.

In other words, treat both as your pension plan or at least for RRSP since it's punitive to withdraw funds prematurely.

Not sure whether Questrade has the option of USD denominated RRSP and TFSA but the ACB/book value indicated on your US stock holding will be in CAD and that means you take additional risk in Forex. Simply put, you may have capital gain in USD terms but you could lose in CAD equivalent when the Loonie is strong.

Moreover in TFSA you cannot claim foreign tax credit for US dividend paying stocks. Unlike Roth IRA, the Americans do not consider TFSA as "true" tax-sheltered account since you could withdraw funds from the account and contribute that amount next year without inpunity. Simply put, the 10% to 15% witholding tax on dividends/distributions received still apply but you cannot claim the credit when filing tax return.

BTW, I would strongly advise to buy Gordon Pape the Ultimate TFSA guide to get yourself informed before making any financial decision.

[hinz]

Put all investments generating a capital gain in the TFSA.
Keep your GICs and fixed income in the RSP.

Couldn't say it better myself but you do need cash to make it happen and after paying down your debt. Otherwise it's all academic.

[studebone]

A small but very relevant detail about the TFSA:
All withdrawals are tax free. This is very usefull when you think about redeeming your investments while in retirement.
You will not be paying any taxes on these withdrawals. On the other hand, you'll convert your RRSp into a RIF by age 71 and then any withdrawal about the minimum yearly payment is subject to witholding taxes ranging from 10 to 30% depending on the amount and if you are in Quebec or not. This is definately less than the income tax you are paying now, but much larger than the 0% tax on TFSA withdrawals.

Say your are 30, and you max out your TFSA for the next 41 years. That is 205, 000 that you will have access to TAX FREE! Factor in an annual growth of 8% and this will give you 1,212,000 TAX FREE after 41 years!
So think about it the TFSA does not give you an imediate tax break but it does in retirement. I think this is important for investors who plan to spend quite alot of money during retirement.
blackrock13 is this still too small for you?

I would not rule out any plan, but a combination of both that takes into account your current (Home Buyers plan, Life Long Learning Plan, income tax cut) and furture needs (other income in retirement, length of retirement) is ideal.
Invest away terbites!

[burt-oh-my!]

I like TFSAs a lot. I have done fabulously with mine because I went for the riskiest investments I could find in it.

Also, I like their guaranteed non-taxable status. Who knows what tax rates we'll have in 25 years? It is quite possible that you put funds in an RRSP and get a deduction at 40%, then pay 50% on withdrawal.

Rever forget that the government OWNS your tax rate otimes your RRSP. If you have a million bucks in an RRSP and you are a top tax payer, your RRSP i sonly worth $550k to you.

[hinz]

Rever forget that the government OWNS your tax rate otimes your RRSP. If you have a million bucks in an RRSP and you are a top tax payer, your RRSP i sonly worth $550k to you.

So true but it's uncommon since on average the RRSP balance in Canada for baby boomer is shockingly less than $100K.

The governments will "punish" you for doing the right thing by going overboard (maxed out the contribution) and getting lucky in generating net worth more than $500K in RRSP....once you are 71 and forced to convert to RRIF and take the money out going forward.

BTW, you should question any financial adviser why he or she keeps on demanding you to make contributions to mutual funds in RRSP when the balance is ballooning to the point that freeze on contribution makes more sense taxation wise.

Let's hope your adviser is not counting on a million bucks in an RRSP and sell you annuity before converting to RRIF.

[Mencken]

i maxed out my TFSA already. and i was looking to trade. but i was actually planning on trading in the US stock market then i found out that ...like ur RRSP, it can only have Canadian holdings...can anyone confirm?

No, like your RRSP it can have any amount of US holdings. The restriction on RRSPs was dropped a couple of years ago, and the TFSA has the same rules.

[Mencken]

Not interested one bit in the TSFA. Too small, too slow and too conservative, especially with my profile.

That comment I don't understand. If you have any non-registered investments it makes nothing but good sense to max out your TFSA every year. Use it for the investiments in you overall portfolio that attract the highest tax rate. I've used mine for equities trading, day trading, and general fun stuff. No worries about whether my trading is capital gains or straight income or whatever....it is tax tree once it is in the account. And with mine and my SO together at 10K per year it will add up to a sizable fund in a very few years. 20K this year without any profits/losses considered.

You can't use it for options as far as I know, but otherwise wide open pretty well.

[On_the_side]

Well it's been a year for the TFSA so how did you do? Investing very conservatively mine is at $8900. I'm sure some of you have done very well so who's is bigger?

bd

that's conservative? what'd you invest in? my advisor put me in one stock and i was within $100 of your y/e balance

[Rockslinger]

Is a GIC inside an TFSA CDIC guaranteed? If yes, does it share the $100,000 limit with your RRSP?

[turbin]

I manage money for my clients and would not recommend to trade TFSA.. The best is to lock in your return by investing in high quality debentures or corporate bonds. Since all your interest income is tax free, you will achieve around 7 to 10% return no problem. Earlier in 2009, lots of banks were issuing what they called the hybrid bonds/tier 1 capital to clean up their balance sheet. Most are issued with north of 10% coupon at PAR, and if you buy it in the market now you have to pay a premium of around $120. However, I am young and losing 5000 is not a really big deal for me and I would trade options. Buy some put on the financials and call options on energy stocks.

[turbin]

Rather or not the GIC would be insured depends on the issuer. The TFSA is just an account to hold your investment. You can have coverage of more than 100k if you have multiple issuer since each should provides up to 100k. If you are with a brokerage accounts that is under the CIPF, you will have up to $1 mil coverage if they default

[burt-oh-my!]

I really dont see the point at today;s interest rates to put a GIC into a TFSA. You will save like, what? maybe 40 bucks of tax on the interest? Far better to shoot for the moon with risky investments.

[danmand]

I really dont see the point at today;s interest rates to put a GIC into a TFSA. You will save like, what? maybe 40 bucks of tax on the interest? Far better to shoot for the moon with risky investments.

Or, maybe better, put the money into 10%+ instruments.

[burt-oh-my!]

Yes, 10% + instruments like equities.

[danmand]

Yes, 10% + instruments like equities.

or income trusts, LP's etc

[burt-oh-my!]

Income trusts most assuredly ARE equities.

[danmand]

Income trusts most assuredly ARE equities.

Technically, they are not. I think you know that an income trust is the right to an
income stream from a company, not a share of the company's assets.

[oil&gas]

I could be wrong but to me the term equity (or more specifically
common equities) is equivalent to stock also
referred to as common share. The stock or share of a trust are sometimes
referred to as an income trust or income fund to distinguish it from the
stock of a corporation. The assets of a typical equity mutual fund
mainly comprises stocks of corporations but to my knowledge holding
income trusts in the stock portfolio of a stock fund isn't uncommon.

Any difference between the business model of a corporation and that of
a trust is of little or no concern to their investors in the stock market
I believe. There was a time when the shareholders
of a trust could in some way share the liability of the company
they own partially. I believe that is no longer an issue.

[oil&gas]

Yes, 10% + instruments like equities.

Stocks with 10%+ yield is becoming an ultra-rarity even among
income trusts. If you do find one such income trust it will most likely
have to cut its distribution by 2011 anyway when the new legislation
governing trust taxation is implemented.

High yield is usually a sign of weakness in the underlying business of the
stock. High yield seekers may as well invest in promising income stocks
with good growth potential.

[burt-oh-my!]

Income trusts and equities are both ownership of a business entity. You will live or die based on their profitability.

There ARE extremely highly leveraged instruments out there which can goose your returns which you can put in your TFSA.

[hinz]

Stocks with 10%+ yield is becoming an ultra-rarity even among
income trusts. If you do find one such income trust it will most likely
have to cut its distribution by 2011 anyway when the new legislation
governing trust taxation is implemented.

+1

BTW, you could try your luck by using the $5k contributed in 2010 to buy a truckload of CLC.UN right now....:eek:


High yield is usually a sign of weakness in the underlying business of the
stock. High yield seekers may as well invest in promising income stocks with good growth potential.

Too bad Junk gets PC'd lately!! You get high yield for higher risk. Anybody say otherwise is trying to con you like Bernie Madoff, Earl Jones and the newest member Ian Toews

If you really want to try your luck, you would be better off to invest XHY, the CAD hedged ishares HYG. Not recommend since the spread is less attractive compared to a year ago and the product lacks liquidity.

I prefer something liquid and not hedged, say investing HYG or JNK in RRSP. Personally I invest my fixed income component, be bond ETF or GIC solely in CAD since the bulk of the "liabilities", aka expenses during the retirement will be here in the foreseeable future.

BTW, not sure how CRA is going to treat the distribution in TFSA since those CAD hedged bond ETFs track USD bond ETFs and unlike Roth IRA, the Americans don't consider TFSA "real" tax shelter. That means in TFSA there could be 10% to 15% withholding tax from the Americans, while you could lose opportunity to claim federal foreign tax credit when filling tax returns.

Not good when there's a tax leakage in TFSA.