Clients confused about TFSA rules

Despite an increasing amount of attention on TSFAs since budget 2015 was released, 28% of Canadians are still unsure of how these accounts work, finds a survey by Tangerine.

In addition, just over half could identify the new TFSA contribution limit of $10,000, and only 14% could identify the effective date of this new contribution limit (January 1, 2015).

Read: Politics could shrink TFSA contribution room

Of those Canadians surveyed, 51% reported they have a TFSA. But even among these account holders, there was confusion when it comes to contribution limits and rules. According to the findings, 31% of the TFSA holders are unaware you can carry over contribution room from previous years, and the same number (31%) are unaware they can contribute to their TFSA at any time throughout the year.

Read: Essential tax numbers for 2015: Updated

Additional findings include:

• 62% of Canadians who have a TFSA only contribute once a year;
• 38% are using a TFSA to save for retirement;
• 42% have previously maxed out their accounts; and
• 9% of Canadians plan to open a TFSA this year, while 51% don’t plan to because they say they don’t have enough money.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.