How many people begin the start of every year uttering that same phrase? How many people actually go through the entire year, fulfilling the resolution they had hoped for on January 1st? Not many.
Typically, it’s because the change involves doing a lot of something you may not want to do at all. Going to the gym, eating healthier, and spending more time studying are common resolutions that tend not to last past the first couple of months. Opening up a Tax-Free Savings Account (TFSA) is a resolution you may not hear too often, but is something so simple and effective that it could change your life forever.
As of 2016, the Liberal government has reduced the maximum annual contribution to your TFSA to $5,500. That being said, the last thing you want to do is over-contribute. Paying more than the ceiling allows for, comes with a penalty, and becomes an easy-way to backtrack your retirement plan.
It’s never a bad time to open up a TFSA. As a student, stick to minimal contributions for now; put whatever extra money you may have away. This will slowly start to add up and the number you reach will shock you by the time you are ready to regularly contribute. As a young adult with a full-time job, set up automatic payments so you don’t need to worry about having to remember to contribute. In no time, you will see your savings sky rocket. Lastly, you may feel like it’s too late to open up a TFSA. You already have a family, a home and a steady job, but it was something you never really thought of. Open up a TFSA and contribute the maximum that you can afford. You will make your life, and your families lives much more comfortable when you choose to retire.