By 2013, why don't more than 1/3 of Cdns. have a TFSA?

My TFSA is nearly maxed and I plan on keeping it that way until I can retire.

I reccomend it to all my workers.

Its a great plan

" Yet Canadians aren't maxing out their TFSAs "
Well, duh, seems to me we just read articles complaining that Canadians have too much debt.
Why act surprised?

Anyone earning less than $50000 should max TFSA first, and then consider RSP. It is almost assured that when we cash in our RSP's, tax rates will continue to increase. We will be paying a higher tax rate cashing in our RSP's than what we received as a deduction.

My TFSAs are always maxed out. So are my RRSP's. The remainder of my disposable income is put into parternerships for additional tax shelters.

a couple days ago there was an article about a person that has a 625$ a month car payment on a 2000$ per month income. Is it really surprising that people aren't maxing out their TFSA's? about 2/3rd's of Canadians don't even have a TFSA nevermind not maxing it out. There should be 100% participation in this program and even if you can't max it out you should put 500, 1000, 2000 dollars per year in there whatever you can set aside. But for most people it is more important to have the new fancy car, the vacations on credit or the 200$ per month cell phone plan than thinking ahead and saving money for emergency or retirement. This article isn't surprising at all if anything I'm shocked to see that 33% of people have a TFSA.

As a retiree I recommend people approaching the end of their working days to be sure to have the maximum amount in a TFSA. This is available cash when you need it, rather than using income ie. anything more than minimum of RRIF. Clawbacks of GIS for low income individuals will be suffered and high income people need to watch for maxing RRSP's too close to retirement time as you could be clawed back on your OAS, if reporting too much income from retirement savings. OTHER than TFSA. Flaherty has given us a significant break.

EVERYONE should open a TFSA regardless of whether they currently have money to contribute.

Your contribution room accumulates even if you've added nothing, so if a few years down the road you inherit a lump sum like $50,000 or something you'll have a place to stash it and not be taxed on the returns it generates.

You have to have $5K in order to invest it. This is great for those who can afford to have this kind of money lying around, as one person said "as a retiree I recommend it" the average wage earner or single parent doesnt have this kind of money and many live pay check to pay check so give more tax credits for the low income earner instead

TFSA's are great for affluent people. Absolutely useless for people struggling with debt. I've seen people with $20,000 in credit card debt at 24% interest, and the bank has convinced them to open a TFSA, and pay them 1% on their $1,000 balance. Why?

Some people have a bank savings account within their TFSA that they use as a regular savings account. This is not how you take advantage of the TFSA. Even if you have an average balance of $2,500, and get a rate of 1.7%, you would earn $42.50 per year in interest. Most banks don't even issue a T5 slip for under $50. Even if you get a T5 slip, and you are in the middle tax bracket, you would only pay $12.75 in tax.

If you would not otherwise have a non-registered investment account, you probably don't need a TFSA.

Wish I could max out a TFSA. I don't make enough money to have extra lying around to contribute. A TFSA is useless to low income earners like me. Perhaps the government could help us by matching our contributions or something.

AB
if you could find the money to put in the TFSA if there is a government match then you can find the money to put in a TFSA without a government match. If the reason you don't have one is you don't have enough money because of low income how would you magically find extra money if there was a government match?

By all means invest in a TFSA if you can, but also shop around for the best interest rate. Never mind the 1%. You can do much better. One outfit I've heard of pays 3% & is as safe as your favorite bank. Please shop around & if you possibly can, make it for the full 5 years.

I don't have any investments since the cost of living is going up and the salary stays the same. Also there is no more job security. Besides all these investments pay very low % in earned interest which is taxable. You may not pay taxes for few years but when you cash out that's when you get hit by taxes. I rather keep my money in my account and have access for emergencies than tight it in TFSA for 5 years and be penalized when I need to withdraw it. In the meantime the Banks are making big money on our investments by reinvesting at high interest rates while we getting 1or 2% which is very low on the money which I cannot touch. The money which you invest today will have lower value in the next few years.

You have to enjoy life while you are still young. Money is not everything. People save for retirement and when they get old and sick no money can restore their health. I believe to put money away for rainy days and besides when you retire you get government's pension which you earned working all your life.. Too many people worry more about their investments rather than worry about their health. Health is wealth

If one is a US citizen (even though a Cdn citizen and resident)the income in the TFSA is taxed by the US (IRS). Plus if one has a TFSA they must do special trust fund reporting annually (2 returns, US 3520 and 3520A.) All this is too much bother for most and eliminates the tax free advantage.

Anna you wrote:

''Besides all these investments pay very low % in earned interest which is taxable. You may not pay taxes for few years but when you cash out that's when you get hit by taxes. I rather keep my money in my account and have access for emergencies than tight it in TFSA for 5 years and be penalized when I need to withdraw it.''

Maybe poor understanding is why you don't have a TFSA. You don't pay taxes on any interest earned in a TFSA, you don't get penalized for taking your money out of a TFSA, you just take the money out no fees, no penalties, no taxes to pay. I agree that you need to enjoy life while you are young but enjoying life doesn't mean buying new cars every 2-3 years or buying designer clothes or buying a house that's too big and too expensive for you. Like everything else there needs to be balance between enjoying yourself now and saving money for retirement. I don't think you'll enjoy yourself too much when retirement age comes if you've been accustomed to spend, spend, spend to enjoy yourself while you were young and you either have to work till your 75 or sell off your possessions because the government pension plan amount alone isn't going to get you very far during retirement, lot's of Kraft diner and tv movies.

Maxed out the TFSA. But my returns leave me with a paltry fraction. My fault, however. I certainly was swinging for the fence and the investments were more of a pop fly. Risk versus reward. I don't begrudge it in the least. I save my low risk strategies for my RRSP.