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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