How I Use My TFSA: 3 Personal Stories

By RBCDecember 24, 2021

Tax-Free Savings Accounts can be used to save for many purposes. Here's how three investors use theirs.

This article was originally published in RBC Direct Investing’s Inspired Investor magazine.

There’s no one-size-fits-all when it comes to investing styles, portfolio design or goals. That’s why we like to hear from individuals about their own investment decisions and choices. We turned to investors to ask how they use, or plan to use, their Tax-Free Savings Accounts (TFSAs).

Here’s what they had to say:


Alejandro* – Education

Age: 32

When did you open your TFSA?

I opened my TFSA in my mid-twenties.

Why did you open the account?

My friend told me it was a great savings account so I started to find out more about it. The account worked well for me because I could put money away but still have access to it if needed. At the time I didn’t really know what I was saving for so I wanted lots of flexibility.

Have you used your TFSA and if so, how?

Yes, absolutely. A couple of years ago I decided to pursue my MBA. I found an executive program that meant I could keep working while studying, but my TFSA allowed me to cover off a good chunk of my tuition. It worked well; I could take the money out and then still add that contribution back the next year.


Mia* – Mortgage

Age: 40

When did you open your TFSA?

I jumped on it the first year they were introduced. I think that was 2009.

Why did you open the account?

Really, it was just a savings tool for me. I loved the fact that any growth on my investments in the account was tax-free. Of course, the money I invested was after-tax dollars. Other than that, I didn’t really have any big plans for the money at that time.

Have you used your TFSA and if so, how?

As a homeowner, I was looking at ways to pay down my mortgage faster. I decided to withdraw money from my TFSA to put towards my mortgage. The great thing about this is that the money had grown from my investments, so it gave me more to work with. Also, I love that I can put the money back in that I took out…as soon as I get that mortgage paid down!


Sachin* – Retirement

Age: 59

When did you open your TFSA?

In 2009, pretty much as soon as they were introduced.

Why did you open the account?

When Jim Flaherty first announced the plan for TFSAs, I was curious. I was around 50 and had worked hard to regularly contribute to my RRSP. What I remember most was the part about “tax-free investment income” and tax-free withdrawals. I thought it would be another good savings vehicle for retirement.

Have you used your TFSA and if so, how?

Yes, even though it’s supposed to largely be for my retirement. A few years ago we were invited to a “destination” family wedding. I decided at the time to dip into my TFSA to take my family to the celebrations. Since there aren’t any restrictions on what withdrawals can be used for, I was easily able to access my money in the account. It was also a bonus that I didn’t lose the contribution room – I waited a few months and was able to put the amount I used back in the next year.

TFSA contribution limits and other rules and regulations can be found on the Canada Revenue Agency website.

*Names and identifying details have been changed to protect the privacy of individuals.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.