2019 TFSA Contribution Limit – How Much Room Do I have?

TFSA Contribution Limits

The TFSA account is relatively new and often referred to as a younger sibling to the RRSP. The choice of investing in your TFSA or RRSP first is still a debated question but what isn’t up for debate is your contribution amount per year and how much you accumulate in contribution room.

The TFSA contribution limits starts accumulating once you turn 18 unlike RRSP where you need to have income declared to accumulate contribution room. It’s the perfect vehicle to create a passive income machine with dividend investing.

How much you can contribute is based on your accumulated limit and how much you have contributed. Your TFSA contribution room is pretty easy to calculate.

Annual TFSA Contribution Limits

Here are the limits for each year since inception. The total since the beginning and up to 2019 is $63,500. All of the profits made within a TFSA is completely tax free. The latest increase for 2019 was recently announced and can be found on the government website for personal tax limits indexed to inflation.

Year Limit Total
2019 $6,000 $63,500
2018 $5,500 $57,500
2017 $5,500 $52,000
2016 $5,500 $46,500
2015 $10,000 $41,000
2014 $5,500 $31,000
2013 $5,500 $25,500
2012 $5,000 $20,000
2011 $5,000 $15,000
2010 $5,000 $10,000
2009 $5,000 $5,000

If you turned 18 after 2009, take the total for the year before your turned 18 and deduct it from the total and that will be your total contribution room. My suggestion is that you try to keep up with filling the contribution room if you can for long term retirement planning.

Accessing Your Contribution Details

As soon as you file a tax return, you should have an account with the Canada Revenue Agency and you can always check the status of your contribution room under your account. Financial institutions are required to report the contributions.

You simply need to create an account. It’s pretty useful to have the account and you can manage your direct deposit for your tax return.

TFSA Over-Contribution Penalty

If you happen to over contribute, the extra contribution will be subject to a 1% penalty per month. I recently handled an RRSP over-contribution and it’s more paperwork than you want.

If you realize you have over-contributed, quickly withdraw the amount and start filling the forms. Get ahead of it to avoid surprises.

TFSA Growth Opportunity

Having the account is step one in building wealth, the next step is putting your money at work. When you do and you start early, time can do wonders when partnered with compound growth. Below is a graph and table showing the potential growth.

TFSA Growth - 40 Years

Before you think the 10% growth in the table below is not possible, my TFSA market value this November 2018 is at $96,937. Not too far from the $98K in the table I would say. Check out my stock portfolio to see what I hold. Dividend investing is true passive income.

It’s true what they say: “The first million is the hardest!”.

Year Limit Contributions 5% Growth 10% Growth
2009 $5,000 $5,000 $5,250 $5,500
2010 $5,000 $10,000 $10,762 $11,550
2011 $5,000 $15,000 $16,550 $18,205
2012 $5,000 $20,000 $22,628 $25,525
2013 $5,500 $25,500 $29,534 $34,128
2014 $5,500 $31,000 $36,786 $43,590
2015 $10,000 $41,000 $49,125 $58,949
2016 $5,500 $46,500 $57,356 $70,984
2017 $5,500 $52,000 $65,999 $84,034
2018 $5,500 $57,500 $75,074 $98,487
2019 $6,000 $63,500 $85,128 $114,936
2020 $6,000 $69,500 $95,684 $133,030
2021 $6,000 $75,500 $106,769 $152,933
2022 $6,000 $81,500 $118,407 $173,826
2023 $6,000 $87,500 $130,627 $198,909
2024 $6,000 $93,500 $143,459 $225,400
2025 $6,000 $99,500 $156,932 $254,540
2026 $6,000 $105,500 $171,078 $286,594
2027 $6,000 $111,500 $185,932 $321,853
2028 $6,000 $117,500 $201,529 $360,639
2029 $6,000 $123,500 $217,906 $403,303
2030 $6,000 $129,500 $235,101 $450,233
2031 $6,000 $135,500 $253,156 $501,856
2032 $6,000 $141,500 $272,114 $558,642
2033 $6,000 $147,500 $292,019 $621,106
2034 $6,000 $153,500 $312,290 $689,817
2035 $6,000 $159,500 $334,866 $765,399
2036 $6,000 $165,500 $357,910 $848,538
2037 $6,000 $171,500 $382,105 $939,992
2038 $6,000 $177,500 $407,511 $1,040,592
2039 $6,000 $183,500 $434,186 $1,151,251
2040 $6,000 $189,500 $462,195 $1,272,976
2041 $6,000 $195,500 $491,605 $1,406,874
2042 $6,000 $201,500 $522,486 $1,554,161
2043 $6,000 $207,500 $554,910 $1,716,177
2044 $6,000 $213,500 $588,955 $1,894,395
2045 $6,000 $219,500 $624,703 $2,090,435
2046 $6,000 $225,500 $662,238 $2,306,078
2047 $6,000 $231,500 $701,650 $2,543,286
2048 $6,000 $237,500 $743,033 $2,804,215
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