Business & Investment

TFSA Pension: Convert $ 70,000 to $ 1 Million and Pay CRA Zero Tax

$ 70,000 in the donation room available for the Duty Free Savings Account (TFSA) is for Canadians Collect $ 1 Million Over Time.. If successful, you will receive a significant pension without paying taxes to the Canada Revenue Agency (CRA).

If you work and have financial discipline, there is nothing impossible. The federal government introduced TFSA in 2009 to block the Registered Retirement Savings Plan (RRSP). Today, Canadians have no excuse to save for retirement and secure their future financial position.

Insufficient pension

Indeed, the Canadian Pension Plan (CPP) and Old Age Guarantee (OAS) guarantee a lifetime income. Still, neither pension is sufficient to make retirement a comfortable life.You need a third source of income that you will draw most of you Nutrition of the year of sunset..

CPP and OAS benefits are a partial replacement for average pre-retirement income. Therefore, it is best to have personal savings to avoid future financial turmoil. By maximizing TFSA and contributing enthusiastically each year, we can approach our $ 1 million goal.

Formula for success

It takes time to make a considerable nest of eggs. With TFSA, money growth is tax exempt, so the balance accelerates faster. You can also benefit from the magic of compound interest by continuing to reinvest dividends from Core Holding. With a minimum investment period of 25 years and the appropriate assets associated with it, the $ 1 million target is not a big deal.

You can withdraw funds from TFSA at any time, but withdrawing in the middle can defeat your purpose. Keep your focus on your financial goals. Remember that all interest and profits are tax exempt. When it reaches $ 1 million, CRA will not be able to tax $ 1 from TFSA.

Core TFSA Holding

If I were to start a journey up to a million dollars, I would TC Energy (TSX: TRP)(NYSE: TRP) As my core holding. Energy stocks pay a generous 6% dividend. Assuming I have a $ 233,000 savings and a 25 year window, my capital will be $ 1,000,005.88, including dividend reinvestment.

Due to the volatile sector, there may be reservations for investment in TC Energy. This $ 53.18 billion energy infrastructure company is moving more than 25% of North America’s daily natural gas requirements. It also boasts the largest natural gas pipeline network in the region. In Canada, TC Energy is one of the largest private power generators.

The scope of operations is vast and TC’s key assets cover Canada, Mexico, and the United States. The company’s assets related to power generation types are 51% nuclear power, 41% natural gas and 6% wind power. TC’s asset footprint is so diversified that there are multiple platforms for growth.

From $ 25 billion in 2000, TC Energy’s assets are four times more valuable than they are today, or $ 100 billion. In addition, the company derives approximately 93% of its revenue from long-term take-or-pay contracts. About 60% of its revenue comes from regulated assets.

Another compelling reason to invest in TC Energy is the status of a dividend aristocrat. Over the last three years, annual dividend growth has been 9.9%. Since 2000, the annual shareholder return has been 14%. I don’t need to say any more.

Continue the course

The road to a million dollars is difficult. However, if you can continue the course and choose the right investment, you can retire the wealthy with a large TFSA pension.


Stupid contributor Christopher Liu There are no positions in any of the listed stocks.

TFSA Pension: Convert $ 70,000 to $ 1 Million and Pay CRA Zero Tax

https://www.fool.ca/2021/01/23/tfsa-pension-turn-70000-into-1-million-and-pay-zero-tax-to-the-cra/ TFSA Pension: Convert $ 70,000 to $ 1 Million and Pay CRA Zero Tax

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