Keep up with your tfsA

once you also open an rrsp account

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At that point you may want to review which types of investments you'll be holding in the TFSA and which in the RRSP - because of taxation, there is a difference.

you can contribute to your tfsa every year or catch up with your limit any time


​​Each year you can save up to the contribution limit (or 'room') allowed for that year (contribution limit or room).  This amount slowly grows overtime with inflation (2015 was an exception - a temporary change in policy).


You don't ever lose your contribution room. You can accumulate the annual contribution limit for future years if you don’t use it fully in any year.


​​You can make a contribution at any time of the year – there is no deadline. If you have the funds, the sooner you do it the better as your money will be earning investment income.


From a tax perspective, you contribute money after you already paid income tax on it so when you withdraw it you won’t pay any tax. The income your money earns in the TFSA account is tax free (it’s a tax shelter) – both investment income and realized capital gains.

​​Use the table to find out how much contribution room you have​. For example, you you turned 19 in 2017, you get to claim $5,500 for 2017, $5,500 for 2018, and $6,000 for 2019 - a total of $17,000 as of January 2019.​

you can withdraw money any time


​​​You can withdraw the money any time, without losing your contribution room (you can start re-contributing the withdrawn amounts as soon as the next year after you withdrew, in addition to the new contributi0n room for the year). So if one year you withdraw $1000, next year you can contribute $6,500 ($5,500 limit plus $1000). When you withdraw, the best timing is close to the end of the year so that the withdrawal can be added back immediately to your next year’s contribution limit

  • It can get a bit tricky. If you withdraw both your contributions and the interest income/gains on the savings, you can re-contribute the full amount as soon as next year
  • But if you withdrawing money on which you had a loss, you can only recontribute the amount that you’ve actually withdrawn.​​

If you have never contributed to the TSFA, you can go back to the year you turned 18 and as far back as 2009 when the TSFA program started and add up the numbers for each year. 

  • The annual contribution limit was $5,000 in 2009-12, and $5,500 since then – except for 2015 when it was raised to $10,000
  • Start adding these amounts up every year, starting with the year in which you turned 18 because they are cumulative –that’s your contribution room. Keep that in a spreadsheet and make sure to subtract any contributions that you make.


It’s a bit tricky when you live in a province where the age of majority is 19. You get to ‘earn’ your contribution limit for the year in which you turn 18 but you have to ‘save’ it until you turn 19 because you can open the account only when you turn 19.  As soon as you turn 19, you can open the account and contribute for both years, the contribution limit for the year in which you turned 18 and for the current year.

​​If you want to know more about investing and tax, start here.  ​

You can also read iInvestment blogs, such as www.MoneySense.ca or www.CanadianCouchPotato.com (no subscription required), as well as The Globe & Mail and the Financial Post (subscription). 

​​track your contributions


You have to track your contributions because there are penalties if you over-contribute. You will be charged 1% per month on the highest excess amount each month (and you’ll be charged for the full month even if you over-contributed only for a few days). To withdraw the excess, you will have to fill out the Over-contribution Form.  If you write an explanation and ask for leniency, the CRA may be able to reverse the penalty. 


How to track your contribution room? You will find your TSFA contribution limits for the current year in Your CRA Account.  You can call the CRA Tax Information Phone Service (TIPS) toll free.