TFSA increased to $10,000 a year! Best news ever!

Posted by mapetitechou on Apr 27, 2015 in ETFs |

If you live in Canada, you must’ve heard about TFSA change from the federal budget. It has increased to $10,000 a year! I am so excited. If you’ve already contributed $5,500 this year, you have another $4,500 to contribute! That’s huge. What do you plan on doing with the extra contribution room? Last week I had gotten the company bonus which I planned on using it to add to my US equity ETF (VUN) in my non-register account. Now I can add that money to my TFSA account instead. That makes me immensely happy :).

This increase could also potentially solve my re-balancing problem. Basically I follow one of the Canadian Couch Potato‘s model portfolio — 20% Canadian equity, 20% US equity, 20% International equity, and 40% bonds. All my bonds are in RRSP accounts. I maxed out my TFSA contribution room with an international ETF (XEF) which at the moment far exceeds the 20% target. It’s more like 38%. My Canadian ETF (VCN) and US ETF (VUN) are held in non-registered account. So if I wanted to balance the portfolio, I would’ve had to put more money into the non-registered account, which of course would be taxed. But now the TFSA room has expanded, I plan to purchase another US equity ETF in the TFSA account. By the way, if you are looking for an excellent online discount brokerage, I recommend Virtual Brokers. All ETF purchases are commission-free. And they also have a large list of ETFs that are commission-free when you sell them too. That’d cut down your trading cost significantly.

Anyway, hope everyone’s happy about the news and will be taking advantage of this soon! Cheers!

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