by Scott Ronalds
With the turn of the calendar fast approaching, we thought it would be timely to update you on a few important numbers for 2021.
First off, the TFSA limit. The maximum contribution for Tax-free Savings Accounts is once again set at $6,000 for 2021. This means the total lifetime cumulative contribution room for these accounts will be $75,500 (for investors who meet all eligibility requirements). TFSAs offer a rare tax break that all investors should take advantage of. If you don’t have one as a part of your overall portfolio and would like help setting an account up, give us a shout.
Next, the RRSP contribution limit. The max you can add to your retirement savings account next year is the lesser of 18% of your 2020 earned income or $27,830 (unless of course you have unused contribution room from previous years).
If, like many people, you’re looking forward to seeing 2020 come to an end, you may want to get a jump on 2021 by pre-arranging your TFSA and RRSP contributions today (or sometime over the next two weeks). You can call us at 1-888-888-3147 and let us know the amounts you’d like to add to your accounts and we’ll set up the trades for you to take place on the first business day of the new year (January 4).
Another great option to fund your accounts is to set up an automatic purchase plan (also known as a PAC, or pre-authorized contribution). With these plans, you can select the frequency and amount you’d like to contribute to your account on an ongoing basis. They’re a simple and effective way to reinforce an investing discipline.
Have a great holiday season and stay safe out there!
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