Posted by Tim Stobbs on October 15, 2009
Well if you don’t have a TFSA (Tax Free Savings Account) don’t worry because apparently you are not alone. Over at the Wealthy Boomer there is this post which reports that only 34% of people have set up a TFSA so far in 2009. Another 11% plan to do so by the end of the year, while 49% are going to do it in 2010.
So why are the numbers so low right now? I would suspect that most people are actually focused on debt reduction right now rather than actual saving money into an account. Realistically this makes sense since the payback on debt greatly exceeds most fix income type savings products (ie: high interest savings account, GIC…) even if you use a TFSA. The Great Recession woke up a lot of people to the fact the party is over and maybe it is time to get rid of their debt hangover.
What I found really interesting about the post was the fact if you add up the percentages you get 94% of people either have an TFSA or plan to get one by then end of 2010. Of course their is the fact that intentions don’t always translate into action, but that is a stagging amount of people that obviously have some interst in getting one. This would mean that TFSA’s in theory should out pace RRSP as a savings account type of choice post 2010. In 2007 88% of people could have contributed to an RRSP of those only 31% actually did so (see here).
So who knows perhaps TFSA’s might actually get most of us saving again. In any case it’s a good thing.