Clarification of TFSA limits for 2016

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The good news is that this year's increase in your TFSA contribution limit will not be clawed back. The bad news, although not a surprise, is that the contribution limit for 2016 will be reduced back to $5500.

 

Federal Finance Minister Bill Morneau confirmed Monday that the contribution limit on the tax-free savings account will drop back to $5,500 from $10,000 effective Jan. 1, 2016, but that the limit for 2015 will remain untouched. Mr. Morneau also announced that contributions will be indexed to inflation as of next year.

 

TFSA's have become a very important wealth building and planning tool for investors in any stage of life. We are encouraged that TFSA contribution limits will be indexed to inflation and suggest taking advantage of this tax free growth potential if it fits into your overall plan.