Events

🚨 The Retirement Reality Check: Saving vs. Spending

When you are working, your main goal is saving and growing your money.

When you retire, the game completely changes. Growth does not pay for your groceries. Predictable, reliable income does. At this stage, your only major worry is cash flow.

A real retirement plan is not just a passive spreadsheet. It must be a battle tested blueprint. If your plan has not been pushed to its absolute limits, you do not have a plan. You just have a wish list.

What a Strong Retirement Income Plan Looks Like

A safe income plan must be built to survive three major retirement killers:

• The Inflation Surge: If prices go up, your money buys less. Your plan must include income that grows over time, like government pensions or dividend stocks, to protect your lifestyle.

• The Longevity Gamble: If you live past 95, you risk running out of money. A great plan secures guaranteed lifetime income so you can spend confidently without fear of running out.

• The Market Tanking: A severe market crash right when you retire can ruin your portfolio. Your plan needs a safe cash cushion to live off of so you do not have to sell stocks while they are down.

Why Stress Testing is Critical

You would not buy a car that has not passed a crash test. Why trust your life savings to an untested plan?

Stress testing simulates the worst scenarios before they happen.

By testing how your money handles high inflation, long market crashes, and a long life all at once, we find the weak spots today. This lets us build safety nets and fix the issues while you still have time and options.

Do not wait for a market crash to find out if your retirement can survive. Build your plan to last.

Want to see how a resilient plan works?

Click the link below to request a free sample of a stress tested retirement income report. See exactly how we build portfolios to survive inflation, market drops, and a long life.

👇 Get your free sample report here:

A tax-free savings account (TFSA) is a great tool for reaching your savings goals. But are you making the most of yours? Read on to maximize your tax-free savings and avoid these common mistakes.

The federal government introduced the tax-free savings account (TFSA) in 2009. And it’s been gaining popularity ever since. According to PDF Statistics Canada, over 17.8 million Canadians opened at least one TFSA by the end of 2022.

It’s easy to see why. TFSAs are very flexible. You can contribute any time, to a yearly maximum. And withdraw funds whenever you need them (keep in mind, there are re-contribution rules ). Best of all, any investment you hold inside your TFSA grows tax-free.

You can use your TFSA to help pay for a new home, alongside other savings vehicles like the First home savings account (FHSA) and Home Buyer's Plan. Or even your children’s education, a dream project, or retirement. And you’re not taxed when you take the money out, either.

How much can you contribute to your TFSA?

For 2026 , you can contribute up to $7,000 to your TFSA . And you can carry forward unused contribution room from previous years.

Do you have more questions about TFSA contributions? Find answers on our TFSA contribution limits page.

Despite the versatility of TFSAs, there are some potential mistakes to watch out for. Here are four you want to consider.

1. Contributing over your TFSA limit

It’s possible to go over your TFSA contribution limit without knowing it. This happens when you withdraw and deposit money in the same year.

It’s important to remember that on January 1, you gain two things. The first is more contribution room. The second is you also get back the room from withdrawals you made in the prior year.

The Canada Revenue Agency (CRA) charges 1% per month for any amount over your total TFSA limit. That means you’d be charged on the highest excess TFSA amount for each month that the over-contribution remains in your account.

Did you overcontribute to your TFSA? Learn how to fix an overcontribution to a TFSA.  

2. Holding cash in a TFSA

Sure, they have the words “savings accounts” in their title. But TFSAs have little in common with everyday chequing and savings accounts. That means one thing: they’re no place for cash.

If you’re using your TFSA only to hold cash, you could be missing out on tax savings that come from investments that grow in value over time, tax-free. Instead, talk to an advisor about other higher return investments that you can hold in your TFSA.

3. Withdrawing cash to set up a new TFSA

If you’re changing financial institutions, it’s a good idea to pay particular attention to your TFSA. Why? Because moving cash from an existing TFSA to a new one could affect your contribution room. If you make a withdrawal, you can’t recontribute until the following January 1.

Let’s say you withdraw all the funds from your TFSA. Then you set up a new TFSA somewhere else and deposit this money into it. That entire deposit would count as a new contribution for the year. And it could trigger an over-contribution penalty.

The solution? See if your new financial institution can make a direct transfer on your behalf.

4. Not opening a TFSA at all

It’s still a common myth you may have heard. You’ve lost out on years of contribution room if you didn’t open a TFSA in 2009. Actually, what you’ve missed out on is the investment growth you could have realized. You haven’t lost any contribution room.

Even if you haven't opened a TFSA yet, your contribution limit has been growing. If you’ve been over 18 years old since its launch in 2009, you’d have $109,000 in total contribution room.  

The bottom line? TFSAs offer tax-free growth and the ability to access your cash at any time. That of course is subject to the terms of the investments in your TFSA. This could include restrictions on withdrawals or guarantees that could be affected by a withdrawal. 

TFSAs can also work well alongside other investment tools, like RRSPs.

Want to make sure you’re maximizing your TFSA?

👇 Get a complimentary investment planning review today!

Meet Your Speaker: Jacqueline Power

We are happy to welcome Jacqueline Power. She is the Director of Tax and Retirement Research at Fidelity Investments Canada.

Jacqueline has worked in tax and wealth planning for almost thirty years. She is an expert at helping people understand complicated tax laws. At Fidelity, she creates smart ways for people to grow and protect their money.