TFSA is a Hit With Seniors, According to BMO Survey Quebecker Wins BMO’s Grand Prize: $5,000 a Year for Life
TORONTO, The new Tax-Free Savings Account is most popular with Canadians 65 and older, according to a survey from BMO Bank of Montreal.
The survey findings reveal:
* One-third of people 65 and older have opened a TFSA
* One-quarter of those 55 to 64 have an account
* Fifteen per cent under the age of 45 have a TFSA
* Forty per cent of Canadians say their retirement is their savings goal for their TFSA
“There is no age limit for people who want to open a TFSA, so it’s a great vehicle for seniors who are required to begin converting their savings from an RSP starting at 71, said Tina Di Vito, Director, Retirement Strategies, BMO Financial Group. “With more Canadians working beyond the traditional retirement years, many seniors want a range of choices of when and how they use their retirement savings.”
The TFSA is also another option to keep in mind with the tax planning season fast approaching, added Di Vito. “Whether you’re getting back $100 or $1000, consider taking your tax refund and putting it in a TFSA so it grows tax free,” she said.
BMO Contest Winner
BMO announced that BMO Nesbitt Burns and BMO Bank of Montreal Ste-Anne-de-Bellevue Branch client Bryan Badger, 70, of Senneville, Quebec, is the grand prize winner of its $5,000-a-year-for-life contest. The contest, open to all Canadians over 18, ran from Nov. 17, 2008 through Jan. 31, 2009, and received more than 260,000 entries from across Canada.
“I’m looking forward to taking the money and contributing to my TFSA and using some of it for travel to visit my grandchildren,” said Mr. Badger upon accepting his prize. “I will also be giving some to local charities who have pressing needs.”
TFSA Benefits for Seniors
Unlike RSPs, people can contribute to a TFSA after age 71, providing additional opportunities to shelter investment income from tax. Second, withdrawals from TFSAs do not affect federal income-tested government benefits, such as Old Age Security, the Guaranteed Income Supplement and the age amount credit, so investing in TFSAs can help avoid or minimize clawbacks of their benefits.
In addition, individuals who are facing required RIF withdrawals that exceed their income needs can use TFSAs to shelter some of the money withdrawn from future tax on income.
For more about the TFSA and where to open a TFSA at BMO, please visit
The Leger Marketing online poll was conducted from February 5 to 9, 2009 and is based on a sample of 1,502 Canadians aged 18 and older. The margin of error for a sample of this size is +/- 2.5%, 19 times out of 20.
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