"Tax-free" savings account costs investors
- Queen K
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Re: "Tax-free" savings account costs investors
http://www.castanet.net/edition/news-st ... htm#186462
Dead money or safe from being scammed by a white collar psychopath who is draining a company?
Dead money or safe from being scammed by a white collar psychopath who is draining a company?
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Re: "Tax-free" savings account costs investors
Queen K wrote:http://www.castanet.net/edition/news-story-186462-6-.htm#186462
Dead money or safe from being scammed by a white collar psychopath who is draining a company?
1% safety accounts as a long term savings plan/ retirement tool, which the TFSA is meant to be, is a bad return, I would agree that is a bad route to keep your money for a savings plan.
- Rwede
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Re: "Tax-free" savings account costs investors
Of course, financial planners don't make big MERs off cash accounts, so naturally their "minds are boggled" when they see people using them as savings account vehicles.
Having to drive a 2014 BMW around is just so yesterday for them!
Of course TFSAs should be used for wealth-generating activities to fund one's retirement. Anyone holding cash is losing to inflation.
However, different people have different risk tolerances, and with volatile markets, some prefer to park in safety for a while until they are comfortable investing it. That's okay, as long as they understand the downside.
It's the financial planner's job to explain this clearly to those who set up the TFSA in the first place. Those interviewed in the article should be looking at themselves and their peers for adhesion to professional diligence, and stop blaming their clients.
Having to drive a 2014 BMW around is just so yesterday for them!
Of course TFSAs should be used for wealth-generating activities to fund one's retirement. Anyone holding cash is losing to inflation.
However, different people have different risk tolerances, and with volatile markets, some prefer to park in safety for a while until they are comfortable investing it. That's okay, as long as they understand the downside.
It's the financial planner's job to explain this clearly to those who set up the TFSA in the first place. Those interviewed in the article should be looking at themselves and their peers for adhesion to professional diligence, and stop blaming their clients.
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- Bsuds
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Re: "Tax-free" savings account costs investors
So does no one take into account the tax savings of the TFSA?
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Apparently "Robin Hood All Purpose" was the wrong answer!
Apparently "Robin Hood All Purpose" was the wrong answer!
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Re: "Tax-free" savings account costs investors
Bsuds wrote:So does no one take into account the tax savings of the TFSA?
A balanced approach to all accounts like TFSA, and RRSP is best, and to a part RESP. But to put everything as just a cash at low % will not earn any real advancement in a lifetime. Age, time, risk aversion etc etc should all be looked at and then a proper investment plan worked out.
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Re: "Tax-free" savings account costs investors
A TFSA only provides a tax savings IF you are generating a return. Pure cash in there with no return generates no tax savings.
The middle path - everything in moderation, and everything in its time and order.
- Glacier
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Re: "Tax-free" savings account costs investors
hobbyguy wrote:A TFSA only provides a tax savings IF you are generating a return. Pure cash in there with no return generates no tax savings.
In fact, you're paying MORE tax this way because you're probably taking money that you'd be otherwise putting in an RRSP (which is tax sheltered), paying tax on it, and then putting it in your TFSA.
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