Skip to content Skip to footer site map

Happy mature couple on couch

What is a Tax Free Savings Account?

A Tax Free Savings Account (TFSA) is a registered savings plan that protects your investment earnings from taxes. With a TFSA, you don’t pay tax1 on money earned on investments, including any capital gains. You can contribute as much as $5,500 each year to a TFSA. Withdrawals made in the year will be added back to the TFSA contribution room at the beginning of the following year.

How is a TFSA different from an RRSP? 

TFSA contributions are not deductible for income tax purposes, unlike contributions to a Registered Retirement Savings Plan (RRSP). But, when you take money out of a RRSP, the amount is added to your income and taxed at your current tax rate. With a TFSA, you don’t pay tax on the money you withdraw. This means that the TFSA is an ideal savings option if you plan on withdrawing the money before you retire. Also, the TFSA doesn’t expire, unlike a Registered Retirement Savings Plan (RRSP), which must be withdrawn before the holder turns 71.

Approximately 60% of Canadians feel they do not have the necessary knowledge to adequately plan their financial future and admit they need assistance.²

Product overview

Our Annuity Plus TFSA3 is a great way to save for your future and accumulate tax-free investment earnings, even if you only plan to save a little each year. You could use your tax-free savings to buy a new car, renovate your home, start a business or take a dream vacation.

Consider our Annuity Plus TFSA if you: 

  • Already contribute the maximum amount to your RRSP each year
  • Want maximum flexibility in saving
  • Want to reduce the taxes you pay on your investment earnings

1Foresters, their representatives and employees, do not give legal or tax advice. The information given here is merely a summary of our understanding of current laws and regulations. Prospective purchasers should consult their tax or legal advisor.

 2Source: Awareness and Perceptions of Financial Planners in Canada, The Coalition for Professional Standards for Financial Planners, 2014. 

3Underwritten by The Independent Order of Foresters.

412595 CAN (09/15)

Ready to take the next step? Get a quote.