I don’t know what to make of all this fuss.<\/p>\n
Supposedly, there are a lot of people out there that mishandled their TFSA accounts, ended up contributing more than the $5000 allowed in 2009, and are now being assessed the 1% per month penalty. This has lead to much wringing of hands and wailing over the fees (especially since if you opted for a savings account, you made 1% per year<\/em> in interest on your over-contribution).<\/p>\n On the one hand, it was the first year of the TFSA, and people over-contributing to savings accounts with paltry interest were clearly doing so out of ignorance and not trying to out-earn the penalties, so perhaps there could be some leniency in the penalties assessed.<\/p>\n On the other hand, it’s not that complicated an account<\/strong>. The contribution room was $5000 for everybody <\/em>— the RRSP has a similar over-contribution penalty, but people seem to be able to track their contributions for that (and there everyone’s contribution room is different!).<\/p>\n Indeed, before each of my blog posts on the TFSA I summed up the new account in just seventy <\/em>words, which covered both the limit and the having to wait a year part:<\/p>\n “You can contribute money to it ($5000 per year) to grow tax-free until you feel like taking it out. While the banks might charge a fee to withdraw, there\u00e2\u20ac\u2122s no tax penalty (unlike an RRSP), and you can recontribute any withdrawals in later years<\/strong> so you don\u00e2\u20ac\u2122t lose the tax shelter space (again, unlike RRSPs) so it\u00e2\u20ac\u2122s a great account not only for retirement, but also for medium\/long-term savings goals.”<\/p>\n Other blogs and newspaper articles had similar summaries all throughout the introduction, I don’t know how people aren’t getting this.<\/p>\n At least the fuss over the penalties should give the issues prominence in the media so in the future, people will <\/em>get it!<\/p>\n","protected":false},"excerpt":{"rendered":" I don’t know what to make of all this fuss. Supposedly, there are a lot of people out there that mishandled their TFSA accounts, ended up contributing more than the $5000 allowed in 2009, and are now being assessed the 1% per month penalty. This has lead to much wringing of hands and wailing over […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10,16],"tags":[],"_links":{"self":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/posts\/848"}],"collection":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=848"}],"version-history":[{"count":0,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/posts\/848\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=848"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=848"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=848"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}