TAX-FREE SAVINGS ACCOUNT (TFSA)

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Christian Mason
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1 TAX-FREE SAVINGS ACCOUNT (TFSA)

2 DO YOURSELF A FAVOUR! Like paying less tax? Don t we all! And just think of what you could do with the extra money: Travel the world Take time off work Retire early Spoil yourself and your family Why wait? Open a TFSA (tax-free savings account) today! A TFSA is a practical, flexible and effective way to help you reach your goals. Since they were launched in 2009, TFSAs have been a hit with savers. And that s because they re the perfect complement to your RRSP (registered retirement savings plan). Open a TFSA today and watch your money grow tax-free!

Why wait? Open a TFSA (tax-free savings account) today! A TFSA is a practical, flexible and effective way to help you reach your goals.

3 DOUBLE THE BENEFITS The TFSA offers two tax benefits in one: Your savings grow tax-free You can withdraw your money, tax-free, whenever you want If you re a resident of Canada age 18 or older and you have a Social Insurance Number, you can open a TFSA. INVEST UP TO $10,000 TAX-FREE Since 2015, you have been able to put up to $10,000 each year in your TFSA. If you don t make any deposits to your TFSA in a particular year, that contribution room will still be there so you can use it later. Contribution limits are cumulative, which means that the amount of room you have increases each year. START STRONG! You ve never contributed to a TFSA before? No problem! In 2015, you ll be able to contribute up to $41,000. This amount will then go up by $10,000 every year. Unlike the RRSP, TFSA contributions aren t tax deductible. The benefit comes when you make a withdrawal.

If you don t make any deposits to your TFSA in a particular year, that contribution room will still be there so you can use it later.

4 LET S CRUNCH THE NUMBERS Say you deposit $10,000 a year into a TFSA for 20 years, and the same amount into a non-registered (taxable) account. After those 20 years, you ll have a total of $309,692 in your TFSA, but only $260,794 in the other account a difference of $48,898. But why? Because the investment income you earn in your TFSA isn t taxed. Now that s a pretty sweet deal, isn t it? COMPARISON TFSA vs. Non-registered account $400,000 $300,000 $200,000 A difference of $48,898 over 20 years $309,692 $260,794 A $48,898 advantage for the TFSA over 20 years $100,000 Investment income Contributions 0 Total TFSA Total taxable account Based on the following assumptions: Annual return of 4% for a diversified portfolio with a marginal tax rate of 38.4%. ONLINE CONTRIBUTIONS AccèsD makes it easy to open a TFSA, make contributions and select your investment options. It s quick, easy and, above all, secure.

Because the investment income you earn in your TFSA isn t taxed. Now that s a pretty sweet deal, isn t it? COMPARISON TFSA vs.

5 THE TFSA THE DESJARDINS WAY Which type of investment do you want for your TFSA? Desjardins has what you re looking for: TFSA savings account Fixed-rate investments Market-linked guaranteed investments, like our Zenitude portfolios Desjardins Funds, including Melodia, Chorus II and SocieTerra portfolios 2 Helios2 guaranteed investment funds contract 3 Fixed-income securities and publicly traded securities 4 Talk to a caisse advisor who will help you choose the right product for you, based on your investor profile. PAY YOURSELF FIRST Set up an automatic savings account. Withdrawals will be made from your regular account automatically and transferred into your TFSA, and you won t have to lift a finger or even give it a second thought! You set the amount and the frequency of the transfers, and you can make changes at any time. 2 Desjardins Funds are offered by Desjardins Financial Services Firm Inc. mutual fund representatives. Desjardins Financial Services Firm Inc. is a company belonging to Desjardins Group. Funds are not guaranteed, their value fluctuates frequently and past performance is not indicative of future returns. Commissions, trailing commissions, management fees and other expenses may all be associated with mutual fund investments and the use of an asset allocation service. Please read the simplified prospectus carefully before investing. 3 The Helios2 contract is available in Quebec only, through a Desjardins Financial Security financial security advisor. Guaranteed Investment Funds are established by the Desjardins Financial Security Life Assurance Company. 4 Available through a Desjardins Securities investment advisor. Desjardins Securities is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF).

and SocieTerra portfolios 2 Helios2 guaranteed investment funds contract 3 Fixed-income securities and publicly traded securities 4 Talk to a caisse advisor who will help you choose the right product

6 TFSA VS. RRSP How do they stack up? Annual contribution limit Age limit Tax-deductible contributions TFSA $5,000 from 2009 to 2012 $5,500 for 2013 and 2014 $10,000 since 2015 From 18 years old to the day before your death No RRSP 18% of your earned income from the previous year, up to: $24,930 for 2015 $25,370 for 2016 Less the pension adjustment from previous year. Until the end of your 71st year Yes Withdrawals Non-taxable Taxable Investment income Excess contributions Can be used as collateral (security for a loan) Non-taxable Non-taxable No Yes (up to $2,000) Yes No A MATCH MADE IN HEAVEN Have you maxed out your registered plans, like the RRSP or RESP (registered education savings plan)? Do you need to find a place for your annual RRIF (registered retirement income fund) withdrawal? Do you need access to cash for short- or long-term projects? The TFSA is just the tool. It can help you reach your long-term financial goals, but you can also use it to save for the short-term... vacation anyone?

of your earned income from the previous year, up to: $24,930 for 2015 $25,370 for 2016 Less the pension adjustment from previous year.

7 WITHDRAWAL AND RE-CONTRIBUTION RULES Like we said, TFSA withdrawals are tax-free. Even better, the amount you take out frees up the same amount of contribution room the following year. For example, if you contributed $10,000 in 2015 and then withdrew $1,000 before the end of the year, your 2016 contribution limit would be $11,000, that is, the annual contribution limit of $10,000 plus the $1,000 withdrawal from the previous year. AVOID UNPLEASANT SURPRISES! Remember that the amount freed up by a withdrawal only takes effect the following January 1. You ll get dinged by the tax man if you over-contribute. Let s use the previous example: Say you contributed $10,000 in 2015 and withdrew $1,000 the same year. If you reinvest that $1,000 in your TFSA before January 1, 2016, your total contribution for 2015 will count as $11,000, which means you ll be charged an over-contribution penalty. 1 Another benefit is that withdrawals from your TFSA don t compromise your eligibility for income-tested credits or benefits. For more information, see the Tax-Free Savings Account portion of the Individuals and Families section of the Canada Revenue Agency website at cra-arc.gc.ca. 1 Unless you have unused contribution room from previous years.

plus the $1,000 withdrawal from the previous year. AVOID UNPLEASANT SURPRISES! Remember that the amount freed up by a withdrawal only takes effect the following January 1.

8 It s up to you If the TFSA sounds right up your alley, all you have to do is meet with a caisse advisor. Visit our website or give us a call. We ll help you open the right kind of TFSA. desjardins.com/tfsa CAISSES 100% This document is printed on Rolland Enviro paper (06-15)

We ll help you open the right kind of TFSA. desjardins.

Invest. Tax-Free (It will make you smile) Tax-Free Savings Account

Invest. Tax-Free (It will make you smile) Tax-Free Savings Account A Saving & Investing Revolution The Tax-Free Savings Account (TFSA) is considered to be the most important personal savings plan introduced