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When you overcontribute to your TFSA, there is a penalty of 1% per month. In normal circumstances to avoid a long-term penalty, you would have to withdraw the overcontributed money from your TFSA, along with any gains you made from that overcontribution. However, what if the value of your TFSA dips dramatically due to a poor investment?

You may not be able to withdraw your 'overcontributed' amount if there isn't any actual value in your TFSA! This would result in being penalized until you accrue enough contribution room in the subsequent year(s) to 'pay off' your overcontributed amount. We want to avoid this harsh punishment at all costs, so make sure you get a very good understanding of your contribution room prior to contributing to your TFSA.

If you have any further questions about this video's topic or any financial planning questions in general, I encourage you to find a certified financial planner in your area or book a consultation with us to get your savings plan on track.  You can learn more about our services at https://www.parallelwealth.com/planning

OUTLINE:
0:00 - Introduction
0:40 - Overcontribution Penalty
1:21 - Waiving Your Tax Penalty
2:05 - What If Your TFSA Is Worthless?
6:27 - Utilize Your TFSA!
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DISCLAIMER: The videos and opinions on this channel are for informational and educational purposes only and do not constitute investment advice. Adam Bornn is not registered to provide investment advice and as such does not provide recommendations - those looking for investment advice should seek out a registered professional. Adam is not responsible for investment actions taken by viewers and his content should not be used as a basis for investment trades.

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