Valley First

TFSA Benefits Modest Income Earners

Boosted Tax-Free Savings Account limit welcome news says financial expert

April 21, 2015

Penticton, B.C.—Today, the federal government unveiled its 2015 budget and announced an increase to the annual contribution limit for tax-free savings accounts (TFSA) to $10,000. The increase to the contribution limit for tax-free savings is welcome news to many financial experts.

“The potential of paying less tax is always a good thing for the consumer,” says Dominik Dlouhy, an investment expert at Valley First, a division of First West Credit Union. “The increase is generally a good thing for the 10 million-plus Canadians who have opened TFSAs. It’s also a clear benefit to the five million Canadians who have reached their TFSA contribution amounts.”

But the increase to the cap could also benefit Canadians who find themselves in different circumstances.

“It’s been well documented that personal savings in Canada have hit lows not seen in decades,” says Dlouhy. “We tend to think of retirees having TFSAs, but the increased contribution limit can also help young people just starting out, individuals or couples who find themselves in the 20 per cent tax bracket. At this life stage, they’re not receiving the benefit of tax deferral in an RSP. A TFSA can be a powerful tool to help them save for anything, from retirement to that first home down payment.”

Despite the benefits of the increase, Canadians still need to be thoughtful when parking money in a TFSA, says Dlouhy.

“It’s critical to understand your income tax scenario and know your goals before you consider using the TFSA over other investment vehicles, such as an RSP. One size does not fit all, so sitting down with your local investment expert to create a personal investment plan tailored to fit your life and goals is the best first step.”

About Valley First

Valley First is a premier provider of banking, investment and insurance services for residents and businesses in the Okanagan, Similkameen and Thompson valleys. As a division of First West Credit Union, B.C.'s third-largest credit union with 54 branches and 38 insurance offices throughout the province, Valley First brings innovative products, an extensive branch network and local decision making to the banking experience. For more information on Valley First, visit

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