The Federal Budget was delivered last month and I want to share the couple highlights that will be impact most people. The budget increased the Tax Free Savings Account, TFSA annual contribution from $5,500.00 to $10,000.00 commencing with 2015, YES, this year. For those of you who have already made your contribution you can make an additional $4,500.00 by the end of the year and you will not be penalized.
Secondly, the budget lowered the withdrawal limits on Registered Retirement Income Funds, (RRIF) between the ages of 71 and 90. Previously the minimum rate for 71 was 7.38% and the budget lowered it to 5.28%. This is a valuable step as it will help protect people who are living longer, it will allow the balances in their RRIF’s to last longer too.
The parlimentary final vote to pass the budget in June will guarantee the changes.