Last updated: May-26-2017

    
 
How to get around OAS clawback with a TFSA
5/27/2017 9:37:40 AM
HOME : FEATURES : TAX FREE SAVINGS ACCOUNT SECTION : How to get around OAS clawback with a TFSA
Show Printable Version Download Plain Text
 
Fund Library Q&A
Your questions about financial planning, investments, and portfolio management answered by an industry expert



By Robyn K. Thompson  | Thursday, February 09, 2012


 
TFSA STRATEGY

Q – I am 76 years old and earn the maximum amount of money allowed through my retirement pension before the Old Age Security clawback. I would like to withdraw money from my investments to travel with my wife and do not want to face any clawbacks or tax consequences. Which account should I withdraw funds from to achieve my goal: my cash account or my Tax Free Savings Account? – Jack S., Toronto, Ontario

A – Tax-Free Savings Accounts are one of the few gifts granted to Canadian investors from the government. To avoid the Old Age Security clawback and taxable dispositions, you and your wife should withdraw the money from the Tax-Free Savings Accounts (TFSAs).

Holding mutual funds inside your TFSA is an excellent way to increase your overall net worth. You can contribute up to $5,000 a year, and any return on your investments grows tax-free. Funds can be withdrawn from a TFSA tax free at any time for any purpose. Investment income earned within a TFSA and any withdrawals from a TFSA have no effect on your eligibility for federal income-tested benefits, such as Old Age Security. You may also elect to replace the withdrawn amount in future years. However, make sure you follow the contribution rules carefully and do not inadvertently overcontribute in any single year. Happy travels, Jack! – R.T.

Robyn Thompson, CFP, is the founder of Castlemark Wealth Management, a boutique financial advisory firm, specializing in customized financial, investment, and retirement planning. Phone 416-828-7159 or email today to rthompson@castlemarkwealth.com for a no-obligation, no-charge Castlemark Integrity Financial Planning consultation.

Got a question on investments, financial planning, or portfolio management? Click here.

Notes and Disclaimer

The foregoing is for general information purposes only and is the opinion of the writer. No guarantee of investment performance is made or implied. It is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice. Please contact the author to discuss your particular circumstances.

 
:: STOCK SEARCH
Find a Stock

(Leave blank for all)
Symbol   Name
:: MEMBER SERVICES
Username:
Password:
Forgot your password?
Register now
Tech Support
:: USEFUL LINKS
For general inquiries, please email the Librarian.
 
Home |  Features |  Member Services |  Tools |  Funds |  About Us
For any questions or problems with this site, please contact the Librarian.
Page ID: 20:95:1074:00013963:9/19/2016:12:02:29 PM Duration of this visit: 0 sec.