For retirement simplicity, TFSAs represent a breakthrough strategy, writes Rob Carrick for the Globe and Mail.
And they are “still new enough that using them for generating tax-free retirement income is a fresh concept,” he continues.
“Just fill your tax-free savings account with dividend stocks, real estate investment trusts, preferred shares and such, and then pay yourself tax-free income using the combined income and share price appreciation. For simplicity and efficiency, it’s a breakthrough strategy.”
Because they are still a relatively new savings tool, TFSAs likely won’t accumulate enough funds to handle all retirement needs. Yearly contribution limits also keep savings in check, he reports a financial advisor saying.
“TFSAs were designed to be versatile, and so they are. People use them to hold savings, or investing to generate both growth and dividends. But with registered retirement savings plans and registered retirement income funds so well entrenched, TFSAs may not be considered as much as they should be for use by seniors as a retirement vehicle,” writes Carrick.
However, according to another investment advisor, they may be more important than RRSPs, with TFSAs being one of the two best tax-sheltered investments available – the other being your home.
More: TFSAs offer two levels of tax freedom.

ARIA provides a forum for an informed discussion on retirement income adequacy, and other related issues, including pension and retirement coverage, and defined benefit pension plans – ARIA pensions blog, 12 Dunlop Street, Barrie, ON, L4N 1V6 –

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