TFSA Limits

What Are The TFSA Limits

I love the TFSA not so much for a "savings account" but more for holding stock. Within the TFSA, of course, and capital gains cannot be touched by the government. That is a sweet sweet thing.

The formula for TFSA "total deposited amount to date" limit is very simple.

(Current Year - 2008) x $5,000

That means that in the year 2012 I can have deposited no more than $20,000 into my TFSA account. You can catch up to your contribution limit at any time. For example, in 2012 my total accumulated contribution limit is:

(2012 - 2008) x $5,000 = $20,000

If I hadn't contributed anything to my TFSA before I can put in the whole $20,000 in 2012. Or I could have put in $10K in 2011 and another $10K in 2012.

You can take money out of your TFSA at any time but you must wait for for the new calendar year to contribute again.

If you put $5,000 into your TFSA in 2008 and purchased 25 Apple (Nasdaq: AAPL) shares @ $200 each and decide to sell those shares on August 20, 2012 for the market price of $648 a share then you can withdraw the entire amount ($16,200) and the Canadian government can't touch a thing (you don't have to withdaw the whole amount you can withdraw whatever amount you want). Regardless of what you withdraw you'll have to wait until the new calendar year until you can add more to your TFSA.

Yes, the government adds a consumer price index factor to the $5,000 limit every year but with inflation so low I wouldn't bother worrying about it

Here's a chart:

2009 = $5,000 
2010 = $10,000 
2011 = $15,000 
2012 = $20,000 
2013 = $25,000
2014 = $30,000
2015 = $35,000
2016 = $40,000
2017 - $45,000
2018 = $50,000
etc.