Are you having trouble maxing out your TFSA every year? Join the club. A recent BMO survey found Canadians contributed $4,592 to their TFSA last year—a decline of 17% from 2015.
The most common reasons for contributing less include not having enough money to invest (43%) and needing the money for other expenses (36%).
Since every Canadian above the age of 18 is given the same amount of TFSA contribution room each year, it’s easy to calculate how much to contribute on a weekly, biweekly, or monthly basis.
The TFSA contribution limit for 2017 is $5,500, but the limit for 2018 hasn’t been announced yet.
If you want to get a head start on next year and the limit stays the same, you should set aside $105.75 every week. That will leave you just $1 shy of making the maximum contribution for the year. If the limit increases to $6,000, a contribution of $115.38 every week will get you close to maxing out your TFSA. You’ll only be $0.24 short of the maximum.
If you want to make a biweekly contribution instead, contribute $211.50 every other week if the limit stays the same. Again, you’ll be $1 shy of making the maximum annual contribution. If the limit rises to $6,000, a biweekly contribution of $230.76 will leave you $0.24 below the maximum.
If a monthly contribution is easier, you’ll need to contribute $458.33 if the limit remains at $5,500. You’ll only need to contribute an additional $0.04 at the end of the year. But if the limit increases to $6,000, an even $500 a month will get you to the maximum.
Keep in mind that if you’ve never maxed out your TFSA, you’ll have additional room and be able to contribute much more on a regular basis.
How to max out your TFSA
If you want to make the maximum contribution every year but come up short, take a look at your spending habits and see where you can slash your costs. For example, cutting the amount you spend on clothing, take out, or alcohol will give you some extra cash. Also, doing a bit of comparison shopping before buying anything can help you save a few bucks.
Another way you can try to max out your TFSA is to force yourself to save by setting up an automatic savings plan. If the money’s not sitting in your chequing account, it’s harder to spend.