Comments on: TFSA – Part I: Misconceptions http://blog.canadian-dream-free-at-45.com/2010/01/13/tfsa-part-i-misconceptions/ Wed, 08 Feb 2012 17:31:40 +0000 hourly 1 http://wordpress.org/?v=3.1 By: Fiona Bailey http://blog.canadian-dream-free-at-45.com/2010/01/13/tfsa-part-i-misconceptions/comment-page-1/#comment-40443 Fiona Bailey Mon, 22 Feb 2010 19:15:30 +0000 http://blog.canadian-dream-free-at-45.com/?p=1293#comment-40443 I have GIG's in my RRSP which are earning 4.5% Can they be moved to a TFSA if I pay income tax on the full amount. Please advise. Thanks I have GIG’s in my RRSP which are earning 4.5% Can they be moved to a TFSA if I pay income tax on the full amount. Please advise.

Thanks

]]> By: Erick http://blog.canadian-dream-free-at-45.com/2010/01/13/tfsa-part-i-misconceptions/comment-page-1/#comment-38838 Erick Tue, 19 Jan 2010 22:22:46 +0000 http://blog.canadian-dream-free-at-45.com/?p=1293#comment-38838 @Robert You said "although foreign currency is an eligible holding, I don’t know of any brokerage that will hold it for you". The only company that I'm aware of that that currently allows you to hold and trade in USD is Questrade: http://www.questrade.com/trading/registered_accounts_tfsa.aspx @Robert

You said “although foreign currency is an eligible holding, I don’t know of any brokerage that will hold it for you”.

The only company that I’m aware of that that currently allows you to hold and trade in USD is Questrade:

http://www.questrade.com/trading/registered_accounts_tfsa.aspx

]]> By: Robert http://blog.canadian-dream-free-at-45.com/2010/01/13/tfsa-part-i-misconceptions/comment-page-1/#comment-38822 Robert Tue, 19 Jan 2010 15:20:16 +0000 http://blog.canadian-dream-free-at-45.com/?p=1293#comment-38822 Canadian Dream is right, the answer is no. Some people were swapping investments out of an RRSP for other investments in the TFSA (eg $5,000 of bonds moves from the TFSA into the RRSP, $5,000 of stock moves from the RRSP to the TFSA). This is allowed with the open account, but the government recently ruled that it is NOT allowed with the TFSA. Canadian Dream is right, the answer is no. Some people were swapping investments out of an RRSP for other investments in the TFSA (eg $5,000 of bonds moves from the TFSA into the RRSP, $5,000 of stock moves from the RRSP to the TFSA). This is allowed with the open account, but the government recently ruled that it is NOT allowed with the TFSA.

]]> By: Canadian Dream http://blog.canadian-dream-free-at-45.com/2010/01/13/tfsa-part-i-misconceptions/comment-page-1/#comment-38815 Canadian Dream Tue, 19 Jan 2010 11:51:24 +0000 http://blog.canadian-dream-free-at-45.com/?p=1293#comment-38815 Milind, To my knowledge the answer is no. By removing the money from an RRSP you trigger a tax event, since the TFSA is funded with after tax dollars. So you can't avoid the tax. Tim Milind,

To my knowledge the answer is no. By removing the money from an RRSP you trigger a tax event, since the TFSA is funded with after tax dollars. So you can’t avoid the tax.

Tim

]]> By: milind http://blog.canadian-dream-free-at-45.com/2010/01/13/tfsa-part-i-misconceptions/comment-page-1/#comment-38790 milind Mon, 18 Jan 2010 22:12:54 +0000 http://blog.canadian-dream-free-at-45.com/?p=1293#comment-38790 Hi there Can you transfer an RRSP to a TFSA without penalty Hi there

Can you transfer an RRSP to a TFSA without penalty

]]> By: Financial Student http://blog.canadian-dream-free-at-45.com/2010/01/13/tfsa-part-i-misconceptions/comment-page-1/#comment-38642 Financial Student Thu, 14 Jan 2010 16:42:08 +0000 http://blog.canadian-dream-free-at-45.com/?p=1293#comment-38642 Robert: I undersoodd that. I also see that you did have the interest calculation included in the spreadsheet and in my numbers it doesn't matter which method I use according to the spreadsheet. The spreadsheet doesn't show withdrawals though. With the RRSP you have an extra million to get growth from. So I expected that growth to be worth it. However, I just found the time to run the numbers and both fund run out at almost the exact same time. 1000 extra left in the RRSP. Not really worth it. Hmmm... Interesting. Thanks Robert. Robert: I undersoodd that. I also see that you did have the interest calculation included in the spreadsheet and in my numbers it doesn’t matter which method I use according to the spreadsheet.

The spreadsheet doesn’t show withdrawals though. With the RRSP you have an extra million to get growth from. So I expected that growth to be worth it.

However, I just found the time to run the numbers and both fund run out at almost the exact same time. 1000 extra left in the RRSP. Not really worth it.

Hmmm… Interesting. Thanks Robert.

]]> By: Robert http://blog.canadian-dream-free-at-45.com/2010/01/13/tfsa-part-i-misconceptions/comment-page-1/#comment-38638 Robert Thu, 14 Jan 2010 15:46:38 +0000 http://blog.canadian-dream-free-at-45.com/?p=1293#comment-38638 dlm: You can have multiple RRSPs, just like having multiple TFSAs, as long as you don't overcontribute. Your question is really about GICs. An RRSP/RRIF/TFSA can hold almost any investment you choose. The redemption of a GIC/RRSP should be explained to you when you buy it. If you want someone to help you manage multiple RRSPs or various GICs within a single RRSP account, allow me to suggest working with a broker. Alternatively, you could keep them all at the same institution. That would simplify your life. dlm: You can have multiple RRSPs, just like having multiple TFSAs, as long as you don’t overcontribute. Your question is really about GICs. An RRSP/RRIF/TFSA can hold almost any investment you choose. The redemption of a GIC/RRSP should be explained to you when you buy it.

If you want someone to help you manage multiple RRSPs or various GICs within a single RRSP account, allow me to suggest working with a broker. Alternatively, you could keep them all at the same institution. That would simplify your life.

]]> By: Robert http://blog.canadian-dream-free-at-45.com/2010/01/13/tfsa-part-i-misconceptions/comment-page-1/#comment-38637 Robert Thu, 14 Jan 2010 15:45:31 +0000 http://blog.canadian-dream-free-at-45.com/?p=1293#comment-38637 Financial Student: What you're missing is the taxes you'll pay on the $12,000 (in your example) when you take it out of the RRSP before you can spend it. It's fun to have $12,000, but it's how much you can spend that really matters. Good luck with your quiz (although I'm sure you don't need luck). :) Financial Student: What you’re missing is the taxes you’ll pay on the $12,000 (in your example) when you take it out of the RRSP before you can spend it. It’s fun to have $12,000, but it’s how much you can spend that really matters.

Good luck with your quiz (although I’m sure you don’t need luck). :)

]]> By: CPS http://blog.canadian-dream-free-at-45.com/2010/01/13/tfsa-part-i-misconceptions/comment-page-1/#comment-38631 CPS Thu, 14 Jan 2010 13:06:32 +0000 http://blog.canadian-dream-free-at-45.com/?p=1293#comment-38631 This is a great summary of misconceptions. Often times these simple questions can be overlooked. I was curious about the multiple TFSA accounts. It seemed to be possible, but never had it confirmed. Thanks for sharing This is a great summary of misconceptions. Often times these simple questions can be overlooked.

I was curious about the multiple TFSA accounts. It seemed to be possible, but never had it confirmed.

Thanks for sharing

]]> By: dlm http://blog.canadian-dream-free-at-45.com/2010/01/13/tfsa-part-i-misconceptions/comment-page-1/#comment-38607 dlm Wed, 13 Jan 2010 22:33:42 +0000 http://blog.canadian-dream-free-at-45.com/?p=1293#comment-38607 This is good information. I could also use information on RRSP/GIC/RIFs -- comparing policies at different financial institutions re withdrawals etc. It's extremely difficult to track interest and withdrawals with several years' contributions squeezed into one RRSP or RIF. Can you have many separate plans? ETC. Thanks. This is good information. I could also use information on RRSP/GIC/RIFs — comparing policies at different financial institutions re withdrawals etc. It’s extremely difficult to track interest and withdrawals with several years’ contributions squeezed into one RRSP or RIF. Can you have many separate plans? ETC. Thanks.

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