My thoughts on the Tax-Free Savings Account

I want to open up a tax-free savings account, and I really appreciate all of the comments left about what you’re doing with your TFSA.

As I suspected, most of you are with ING or PC Financial – which were the 2 institutions I had narrowed my choices to.

But then I got to thinking, what the heck am I going to save up for? Retirement, I guess. But I just don’t have any extra money to throw into retirement right now. $150 bi-weekly is going into my RRSPs, and I’m already stretched thin to save for other things, since I’m also putting away $275 bi-weekly into my Travel Fund.

The thought of dividing up the $5,000/year (the maximum amount you’re allowed to deposit into a TFSA per year) into multiple savings accounts with multiple purposes, and then trying to track my deposits and withdraws from all of these accounts seems way, way too confusing to me. I’d rather have 1 TFSA that is devoted to one purpose only. Which is why my TFSA is never going to hold my EF or my Travel Fund, or anything like that, with multiple withdraws and deposits per month.

And while the thought of throwing all non-RRSP money into TFSA right now seems like a good idea, the amount of tax I will save on capital gains just isn’t worth it the hassle. At least not at this point in my life. I just don’t have enough money to make it worth my time and effort.

Right now, my thought is to open up a TFSA right now, deposit a minimal amount of money into it (maybe $25 bi-weekly), and use it in the future either for Retirement, or just for the sake of saving money.