Liberal majority?

[NineNineSix]

Re: Liberal majority?

The problem with it is that it's a vehicle which costs the government a pile of dough in lost tax revenue, and will only really benefit the wealthiest people who have the means to max out all of their savings vehicles. That's his point and I kind of agree with him.

You're right of course...it just depends what you define as 'the wealthiest' people. Does the ability to save $10,000 a year towards retirement make you wealthy? To some, certainly...to others, not at all.

Conventional wisdom is you should try to save somewhere around 10-15% of your annual gross income per year to fund your retirement. So you need to be making $100k-$66K to max out your TFSA, if that's where you choose to put your money first.

[Richd]

Re: Liberal majority?

wonder what percentage of 25-35 year old's can afford to put $10,000 after tax dollars into their TFSA each year?

[owu23]

Re: Liberal majority?

wonder what percentage of 25-35 year old's can afford to put $10,000 after tax dollars into their TFSA each year?

I'd say not many, esp with university loans, possible mortgage and a car payment!

[Gwelfgulfer]

Re: Liberal majority?

wonder what percentage of 25-35 year old's can afford to put $10,000 after tax dollars into their TFSA each year?

I would think the ones that choose to have a better life 30+ years down the road vs. having to keep up with the Jones' today.

[dmcdam]

Re: Liberal majority?

You're right of course...it just depends what you define as 'the wealthiest' people. Does the ability to save $10,000 a year towards retirement make you wealthy? To some, certainly...to others, not at all.

Conventional wisdom is you should try to save somewhere around 10-15% of your annual gross income per year to fund your retirement. So you need to be making $100k-$66K to max out your TFSA, if that's where you choose to put your money first.

Sure but you still have your RRSP which already is a very effective tool and for most, easily satisfies the 10-15% benchmark for retirement saving. If you can afford to max that out and still have $10k left over for your TFSA then yes, I'd say you're doing very well.

[richuwo11]

Re: Liberal majority?

wonder what percentage of 25-35 year old's can afford to put $10,000 after tax dollars into their TFSA each year?

I'm 30 and I don't know a single one.

[NineNineSix]

Re: Liberal majority?

I'm 30 and I don't know a single one.

I'm 32 and know lots.

Increasingly people are choosing to max the TFSA before putting money in your RRSP.

Again though, the room keeps adding up. Maybe you can't save $10k from age 25-35 but you can save $5k. Maybe from 35-45 though you can save that $10k a year, then from 45-55 you can save $15k.

[Bellyhungry]

Re: Liberal majority?

I was pretty surprised by this image to show how red GTA went. My area has been conservative since I can remember, and both ridings in my area went red.

The 416 is kind of expected. The 905 truly surprises me too.

[cantcountstrokes]

Re: Liberal majority?

I think the attack on Justin's age was Harper shooting himself in the face. You're pretty much saying anyone under 45 doesn't have the ability to lead.. guess who is not going to vote for you now.

I never got this point. Harper himself was 45 when he took office. Yet somehow Conservative supporters feel 43 is too young?

[Bellyhungry]

Re: Liberal majority?

wonder what percentage of 25-35 year old's can afford to put $10,000 after tax dollars into their TFSA each year?

I would say it is a small percentage of young people. Too small that none of the parties would bother going after.

[Mersey]

Re: Liberal majority?

So sorry. The claims are all unsubstantiated at this point anyway. In the lead up to the election it went from a balanced budget, to a small deficit, to a surplus, depending on who was speaking. Forgive me for being confused.

My thoughts exactly.

[cantcountstrokes]

Re: Liberal majority?

I would think the ones that choose to have a better life 30+ years down the road vs. having to keep up with the Jones' today.

I generally agree with you but I think that's pretty callous to say in this job environment and the rising cost of homes and cost of living. I am in this age bracket, work in Corporate canada, live a barebones lifestyle short of golf, could use the higher limits, but even I wouldn't say such things about a 30 something making their way in life in Canada. It's not easy out there.

[Mersey]

Re: Liberal majority?

Perhaps, but TFSA room is cumulative and never goes away, so you can 'catch up' later in life. Of course, you won't get the same compounding, but it still is nice.

I just think the TFSA is a fabulous retirement savings plan for everyone. It's easy to use and very intuitive. In a time where increasingly I believe we're going to have to rely on ourselves for our retirement funding, as opposed to government or company pension plans, I think it's a mistake to roll back the TFSA contribution amount.

These are exactly my thoughts and if the CPC wanted to save Canadians money specifically lower income Canadians, the taxes should have been lowered for the lower income earners. To allow a tax benefit for income earned on the TFSA is simply not going to happen for those other than the wealthy.
Don't get me wrong, I do enjoy the benefit but IMO, the TFSA is not an all inclusive benefit.

[low fade]

Re: Liberal majority?

In my 40 year example at 8%, the difference is almost $1.2M. Yes, of course, you could put the $4500 extra into a regular account and still have that $1.2M, but it's basically all taxable. Assuming the gains are all capital gains (and almost all the money would be gains), and you pay roughly 25% tax on those, that's $300k in taxes you'd have to pay versus $0. That's an awful lot of money to me.

Even in your example, potential tax savings of $186k is a lot of money.

If Trudeau does roll back the TFSA limit to $5500, he's essentially said to anyone retiring in 30-40 years that he's going to take a few hundred thousand dollars away from your retirement plan that you'd otherwise have with the $10,000 limit. To me, that's far more significant than any of the nonsense about getting OAS a couple years early, or saving me $700 a year on income tax, but very few people were talking about it as a key issue.

While you may see it as talking to the group you speak of, which happens to be a very small minority, as well as the wealthier segment of the population, who can actually come up with $10,000 a year to put in a TFSA, a great many others see it quite differently.

For instance, it may be viewed as Trudeau saying that if the average Canadian is to have any faith at all that the system is fair, then there must be a limit to how much tax free money those who already have the most should be allowed to earn.

Dispute the dollar figure and the resulting impact if you want, but if we live in a system where taxes are required in order to provide services to the people, allowing a certain segment (i.e. those who can get $5,000 together in a TFSA) to earn income tax-free does indeed shift the tax burden.

What's more, the idea that I can earn tax free money in a TFSA is totally irreconciliable with the concept of integration, which is what our tax system is supposed to be at all times striving for.

I happen to like the TFSA because I can use it, so in terms of self-interest it's great, but in terms of equality of opportunity, there is a number at which it stops being a bona fide vehicle accessible by all and becomes instead a vehicle for only the wealthiest.

[hackerhare]

Re: Liberal majority?

I'm 32 and know lots.

Increasingly people are choosing to max the TFSA before putting money in your RRSP.

Again though, the room keeps adding up. Maybe you can't save $10k from age 25-35 but you can save $5k. Maybe from 35-45 though you can save that $10k a year, then from 45-55 you can save $15k.

I am curious as to why you would max TFSA before putting money in RRSP? Also, in terms of competing venues for your savings, among RESP, RRSP, TFSA and a whole life insurance policy?