The TFSA provides seniors with a tax-efficient savings vehicle to help meet ongoing savings needs, even after they reach age 71 and are required to convert their registered retirement savings into a retirement income vehicle.

Neither the income earned in a TFSA nor withdrawals from it affect eligibility for federal income-tested benefits and credits such as Old Age Security, Guaranteed Income Supplement benefits and the Goods and Services Tax Credit.

Scenario:
François and Evelyn are retired and living comfortably on François’ pension. Evelyn also receives a small pension based on her years of work after raising their children. They would like to save Evelyn’s pension each month and use it to spend the winter in Florida. The TFSA will provide them with an effective means to save for their trip south each year, without paying tax on the interest earned on those savings.