Comments on: This & That: Retirement Savings Edition

By: IRA Rollover Blogg

IRA Rollover Blogg — Tue, 08 Sep 2009 16:16:57 +0000

[...] This & That: Retirement Savings Edition [...]

By: How to Save Enough for Retirement

How to Save Enough for Retirement — Tue, 18 Aug 2009 09:55:40 +0000

[...] This & That: Retirement Savings Edition [...]

By: Michele

Michele — Thu, 13 Aug 2009 16:43:57 +0000

Hello all,
Thank you so much for the information. Wow, you folks are mighty helpful! It’s much appreciated and I’m going to contact ING straight away about the transfer.

Have lovely days!
-M

By: Jamie @ Women in the Green

Jamie @ Women in the Green — Thu, 13 Aug 2009 14:15:03 +0000

ING doesn’t charge transfer fees. For any type of transfer.

By: Jamie @ Women in the Green

Jamie @ Women in the Green — Thu, 13 Aug 2009 00:29:17 +0000

Michelle,

you can request a TFSA to TFSA transfer. Ask ING about it. Its called a T2033 transfer (same as RRSPs). ING will send the request to TD to transfer the funds without withdrawing – you won’t lose any of your room.

I have both RSP and TFSA savings. I’m not maxing out either at this time because I’m trying to pay off debt, but I see RSPs as helpful for the tax deduction to bring my taxable income down. The TFSA right now is for my emergency savings which is in a savings account.

By: Marie

Marie — Thu, 13 Aug 2009 00:27:32 +0000

Michele:
I don’t know if the contents are accurate, but you can also check:
http://www.four-pillars.ca/2009/02/25/tfsa-institution-transfer-strategies/
If you Google “transfer tfsa to another institution”
A TD Waterhouse pdf states
“Q. Can I transfer my TFSA from one financial institution to another?
A. Yes, you can transfer your TFSA from one financial institution to another financial institution. A transfer fee may
apply.
Q: Is the transfer of a TFSA between financial institutions treated as a withdrawal or contribution?
A: No. Provided that a transfer between financial institutions is processed as a direct transfer, it will not be considered a
withdrawal or contribution.”
If there is a fee, you may end up with less money than your current situation.

By: Michele

Michele — Wed, 12 Aug 2009 21:36:40 +0000

Hi Marie,
Thanks for the reply. I feared that would be the case. Your suggestion is my current plan, I was just hoping that maybe a ‘transfer’ right into another TFSA would be different than a ‘withdrawal’. Ah, wishful thinking. At least I didn’t max out the TD TFSA!

A good lesson in shopping around for the best interest rate if nothing else. Lesson learned!

-M

By: Marie

Marie — Wed, 12 Aug 2009 20:41:10 +0000

Michele:
As far as I understand, the better way to transfer would be to wait until the end of December to take the money out of your TD account and then to put it in your ING account in January of the following year. This results in a few days without tax-free-interest.
If you take the money out now, your cannot put it back until 2010.

By: Michele

Michele — Wed, 12 Aug 2009 19:14:48 +0000

Hello all,
I’m really enjoying this discussion of TFSAs and RRSPs! I have a questions about TFSAs that perhaps you can all help me with.

Back in January I initially opened my TFSA with my regular bank (TD) and made a New Years resolution to learn more about money management this year. It’s going really well! In the course of my learning I’ve been looking around and have also opened a TFSA with ING (at a MUCH better interest rate than my TD one). I didn’t max out the TD one initially (about $2500 in it right now) so I have some room to put money in the other account. I want to know if I can move the money from the TD account to the ING account (for the better interest rate) or if taking it out of the TD account would count as withdrawing it and would mean that I couldn’t recontribute that money until 2010.

Thanks for any insight anyone has on this!
Cheers,
-M

By: Rebecca S

Rebecca S — Wed, 12 Aug 2009 19:01:04 +0000

I love the TFSA idea! I have a great pension and very little contribution room available to me. I have opened two TFSA accounts: a savings attached to my chequing account my emergency fund and a Mutual fund account (as of today!!) for my planned spending. I just have to be careful not to contribute more then $5000 between the two of t hem!

By: Peg

Peg — Wed, 12 Aug 2009 17:42:11 +0000

Denboo…I think Gail has recommended RRSPs over TFSAs in regards to taxes in a previous post.

The difference between the RRSP and TFSA is that with the RRSP would actually contribute more than $5000…you would contribute $5000+the taxes you didn’t pay on that $5000. So you end up earning interest on the money you didn’t pay in tax (because you don’t pay taxes until you withdraw). If you rerun the calculations that way you would be comparing apples (TFSA $5000) to apples (RRSP $5000+deferred tax $).

By: This & That: Retirement Savings Edition « gailvazoxlade.com « Taxes Relief

Wed, 12 Aug 2009 17:26:00 +0000

[...] See the original post here: This & That: Retirement Sa… [...]

By: Christy Z.

Christy Z. — Wed, 12 Aug 2009 17:20:46 +0000

Is the 10% rule gross or net?

By: Marie

Marie — Wed, 12 Aug 2009 16:24:14 +0000

Jeff:
An alternative to your statement is to put the money in the RRSP as your are entitled to contribute but to delay the claim on taxes until you move up in tax bracket.
1- contribute to your max (and let it grow).
2- claim on taxes ONLY what brings you to a different tax bracket.
3- when you move up your tax bracket, claim old contributions to keep you in the lower bracket.
(That way you do not use up your TFSA max.)

By: Jeff

Jeff — Wed, 12 Aug 2009 15:43:38 +0000

Gail, with respect to the questions and answers from Charlene, I must respectfully disagree. Based upon their income of $48K and $44K, they should only contribute sufficient amounts to reduce their income to the “next” tax bracket (approximately $40,500). Reducing your income below that amount means reduced tax savings (in ONT is means moving from a 31% refund to a 21% refund). I would then suggest putting the balance of savings into TFSAccounts. In future, assuming their income justifies it, they can withdraw funds from the TFSA and shift them into their RRSPs.