BJK Financial Group Blog

Good News - TFSA limit Increase

We have had a lot of doom and gloom in the news lately. High inflation, possible recession, war in Ukraine just to name a few. It can be hard to find positives in the daily news cycle, or when watching the markets.


That being said, we do have some good news for your TFSA.


A small consolation of the high inflation (cost of living) is the government has raised the 2023 TFSA contribution limit to $6,500. This is a $500 increase from 2022.


This means anyone over 18 can contribute $6,500 as of January 1st, 2023.


It’s important to note that the limit only applies to clients who have contributed the maximum amount in previous years. In other words, unused contribution space accumulates over time and can be carried forward to future years. According to the latest estimate from the Canada Revenue Agency (CRA), only 10 per cent of clients contribute their total TFSA limits.


With $6,500 in new available contribution space coming in January, the total allowable space for those 18 years or older when the TFSA was introduced in 2009 will be $88,000.

Your available contribution room is based on contributions and withdrawals made over the years. You can find yours through your CRA “May Account”


The TFSA Advantage


Since its introduction in 2009, the TFSA has become a fantastic tax-free investment option for everyone.


Your money can be withdrawn at any time and investment returns - be they capital gains from equities sold, or income from Canadian dividends and fixed income - are “tax free”.


In non-registered accounts, by comparison, half of capital gains are taxed and most income is fully taxed at your marginal rate. Dividends are also subject to full taxation, but tax credits can be applied against payouts from eligible companies.


As another comparison, An RRSP is basically a tax deferral. Contributions can be deducted from taxable income Those same contributions - along with the returns they generate over time - are fully taxed when withdrawn again at your marginal rate.


Unlike RSPS, TFSA contributions cannot be deducted from taxable income.


The TFSA is great for short-term savings goals like education or vacations but has also become a very effective retirement tool as the allowable contribution amount grows. With proper planning, TFSA funds can be used as a source of Tax-Free income. This can be very advantages, especially if you are in higher tax bracket come retirement.


A word of caution, many investors contribute to their TFSAs through more than one institution and it’s the account holder who will be penalized if they exceed their limit.


Contribution space from TFSA withdrawals can not be reclaimed until the following calendar year. If you maxed out your TFSA and made a withdrawal in 2022, as an example, you need to wait until 2023 in order re-contribute. That is why it is important to confirm your room through your CRA “May Account”


Investment options for a TFSA


Like a RRSP, a TFSA can hold just about any type of investment including GICs, mutual funds, exchange-traded funds (ETFs) just to name a few.


I ensure your portfolios tailored for any time horizon, risk level or personal goals.

I have spent my professional life helping my clients build the financial plan that is right for them. I work hard to listen to your needs and help you find your goal.


If you want to discuss how a TFSA can benefit your financial future, send me an email [email protected] or give me a call at (519) 279-0186. You can also book an appointment through my website:

Brian Kettles at 11:52 AM
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Brian Kettles
Name: Brian Kettles
Posts: 35
Last Post: April 5, 2024

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The comments contained herein are a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. This Blog was written, designed, and produced by Todd Race Copywriting for the benefit of Brian Kettles who is a investment fund advisor at BJK Financial Group a registered trade name with Investia Financial Services Inc., and does not necessarily reflect the opinion of Investia Financial Services Inc. The information contained in this article comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any securities.


Mutual Funds, approved exempt market products and/or exchange traded funds are offered through Investia Financial Services Inc.


Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the simplified prospectus before investing. Mutual funds are not guaranteed and are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. There can be no assurances that the fund will be able to maintain its net asset value per security at a constant amount or that the full amount of your investment in the fund will be returned to you. Fund values change frequently, and past performance may not be repeated. Investia is not liable and/or responsible for any non mutual fund related business and/or services.