A few years ago when TFSA‘s were a new and exciting thing, our friend Larry MacDonald did an article featuring me (and my son in the picture). The article discussed what TFSAs could be used for. The article was just after I had been laid off from Nortel.
At the time I thought that the TFSA was going to simply be another place to save for my retirement. At the time my RRSPs had no space left to add. As time has passed my opinion of what you can do with a TFSA has changed.
I am using the TFSA as a “safe haven” for middle term (3-5 years) savings. Money sitting in a standard savings account would only be taxed. Putting it into a TFSA shelters any possible growth with that money.
Given I have so many savings vehicles that I currently use (i.e. RESP, RRSP, RDSP, and TFSA), the TFSA’s advantages (for me) are a little less, as I tend to put more money into my son’s RDSP for now.
Yes, that is a real photo of me (many years ago), and if you read the article linked to it, you will learn my actual identity (and you will also get to read a very good article written by Larry MacDonald ).
Personally I like the TFSA vehicle because you can’t be taxed on any growth, if you use this as a long term investment vehicle it can be quite rewarding. The money at the end is yours no matter how much it happens to be. The benefits here are probably more psychological than anything else (at least for me) because you won’t ever have to worry about the tax man coming.