Friday, December 18, 2015

Short Takes: TFSA Use and more

Here are my posts for the past two weeks:

Excuses to Shop

Reader Question about Non-Registered Accounts

Pension Ponzi

ETF Fear, Uncertainty, and Doubt

ETF Tips I Don’t Follow

Here are some short takes and some weekend reading:

Maclean’s explains that TFSAs are being used primarily by older Canadians. This sensible article is a breath of fresh air compared to the nonsense I keep reading about how the $10,000 TFSA limit is needed to help the middle class. As far as I can tell, proponents of the higher TFSA limit want it because it will benefit them (or their clients) personally. Promoting self-interest isn’t so bad, but making up nonsense arguments is annoying. Higher TFSA limits help those with either high incomes or substantial existing savings. That’s the truth. I would benefit from higher TFSA limits; it would allow me to put even more of my savings into TFSAs belonging to me, my wife, and adult kids. But I don’t think more TFSA room would be good for our country.

Preet Banerjee explains how inflation and the change of government affect the TFSA contribution rules in his recent Drawing Conclusions video.

Big Cajun Man says now is the time to do a TFSA transfer if you plan to make a simple withdrawal and put the money into a new TFSA in January. However, if you fill out the direct transfer paperwork, you can make a TFSA transfer at any time in such a way that it won’t count as a withdrawal and contribution.

Frugal Trader at Million Dollar Journey updates us on his journey to financial independence. His family’s annual expenses are currently in the $50k to $52k range without vacations, and he aims for $60k/year passive income by 2020. It’s not clear to me whether this will be enough to cover income taxes and 5 years of inflation. Perhaps he means the $60k figure to be in 2015 dollars so that the actual dollar amount will be larger in 2020.

Boomer and Echo look through a Morningstar report on mutual fund fees to find that Canada ranks dead last among 25 countries.

My Own Advisor tells us his “magic” strategies for growing his dividend income. The most important part of his magic strategies is to actually spend less than you make so you have funds to save and invest.


  1. I think this is a case where you "could" do it yourself, but it might be better to let the banks do the transfer officially. Thanks for the inclusion and have a Happy Holidays !

  2. Thanks for the mention and Happy Holidays Michael.

  3. I really appreciate your comments about TFSA limits. I am sorry to lose the higher contribution room because I have a high savings rate and therefore taxable investments sitting around. But I know I'm not normal, and am really irritated by those who claim to be defending the "hard-working middle-class families" in promoting a policy that really benefits people like me. (I am actually hard-working, but I'm not typical.)

  4. Thanks for the mention. I'm with you on the TFSA limit reduction. In fact, if we just think of 2015 as an aberration then there isn't really anything to get upset about - TFSA maximizers just got a bonus this year and it's back to normal going forward.

    1. @Robb: I've definitely seen a range of takes on this issue. One of the more amusing complaints is that the reduction isn't fair to kids who are under 18 and who won't get 2015's bonus $4500 worth of TFSA room. Going through life demanding fairness is not a happy way to live.