The Canadian government announced today that the annual limit on what one can contribute to their Tax Free Savings Account will increase by $500 starting in 2013. This is the first year since its introduction in 2009 that the government has raised the contribution amount, which is tied to inflation.
The increase from it’s original $5000 annual limit to $5500 is receiving positive feedback from those surveyed. 57% of people who took part in the Bank of Montreal’s latest survey say they plan to contribute the maximum amount they can per year within the next 5 years.
“Over a 20-year period, an individual can accumulate significantly more in TFSA savings than under the original $5,000 annual contribution limit. For example … a middle-income saver could accumulate about $2,340 more in tax savings on their investments than if the additional investment had been made in a taxable savings vehicle (unregistered account).”