Final Tax-Free Balance
$0
Total Value
Tax-Free Earnings
$0
Pure profit
Balance Over Time
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What is the TFSA Growth Calculator?
The Tax-Free Savings Account (TFSA) is arguably the most powerful investment vehicle available to Canadians. Despite its name, it should not be used as a simple savings account. It is an investment account where capital gains, dividends, and interest earned are completely tax-free for life. Withdrawals are also completely tax-free and do not affect government benefits like OAS or GIS in retirement.
How to Use This Tool
- Current TFSA Balance: What you currently have invested.
- Annual Contribution: How much you plan to add each year. Be careful not to exceed your personal contribution room.
- Expected Return: To maximize the tax-free benefits, most investors hold high-growth assets (like equity index ETFs) inside their TFSA rather than low-yield GICs.
Frequently Asked Questions
What happens if I overcontribute to my TFSA?
The CRA will penalize you 1% per month on the excess amount until you withdraw it. Always track your contribution room carefully through your CRA My Account.
If my investments lose value, do I lose my contribution room?
Yes. Contribution room is based on money deposited, not the value of the portfolio. If you deposit $10,000, it drops to $5,000, and you withdraw it, you only get $5,000 of room back the following year.
If my investments grow, do I gain contribution room?
Yes! If you deposit $10,000, it grows to $50,000, and you withdraw the $50,000, you will get $50,000 of contribution room added back on January 1st of the following year. This is how some Canadians have massive TFSA limits.