A  Tax Free Savings Account popularly known by its acronym TFSA is a Canadian account in which contributions, interest earned, dividends, and capital gains are not taxed and can be withdrawn tax-free.

TFSA is a great option for retirement savings for individuals who are looking for an alternate source of income during retirement, or who expect to be in an equal or higher tax bracket once they retire. 

Unlike a Retirement Savings Plan, a TFSA does not need to be converted to an income product at age 71, which makes it an ideal option for retirees who are looking for a way to save on a tax-free basis throughout their retirement. 

The annual TFSA dollar limit for the years 2009 to 2012 was $5,000.

The annual TFSA dollar limit for the years 2013 and 2014 was $5,500.

The annual TFSA dollar limit for the year 2015 was $10,000.

The annual TFSA dollar limit for the year 2016 to 2018 was $5,500.

The annual TFSA dollar limit for the years 2019 to 2021 is $6,000.

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Have you considered segregated funds within your TFSA portfolio.

Many investors may not know that segregated funds can be used in a TFSA. Surprised? While segregated funds have some similarities to mutual funds, segregated funds have unique features that protect your investment. Potential creditor protection, guarantees and avoiding probate are just a few benefits that come along with adding segregated funds to your TFSA.

Here are some of the notable features of using segregated funds in a TFSA:

• 75% - 100% of your premiums (less withdrawals) are guaranteed when your contract matures or on your death, 
• Bypass probate and associated fees by naming a beneficiary,
• No early redemption fees at death,
• Quick payment to beneficiaries after you pass away,
• Private and confidential beneficiary designations, and
• Creditor protection may be available in the event of bankruptcy or lawsuit.

If you want to add segregated funds, a TFSA is a great way to do it.

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