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Question of the Day: What is your stance on AI?
Easy equities TFSA for minors
- Thread starter gaboom
- Start date
TheRidDlerX
Senior Member
I've done it just last week yea. Sent u a PM
Sideshow Bob
Honorary Master
So, depending on their age, when they are no longer minor, would they be able to contribute to TFSA? If you contribute max per month, then you would reach the current limit in about 14 years.
Which wouldn't be a problem, unless the kid decides to raid the TFSA prematurely.
I opened a normal trading account for my child wherein we deposit money and buy shares. Personally I feel that one should not take money out of a TFSA for as long as possible, and hence would then not be of much use for my child until retirement.
While you're investing for your kids in a TFSA, please teach them about finance and money so they don't blow all that good on something stupid.
Teach them about compounding, investing, retirement, diversification, dividends, etc...
Teach them about compounding, investing, retirement, diversification, dividends, etc...
Sideshow Bob
Honorary Master
sure, she will get tax benefit but if you exhaust kid's max limit, would she be able to set aside money of her own in TFSA ? If yes, that would be perfect scenario.
Speedster
Honorary Master
How is that a problem? What's the difference between putting money in and then putting in money themselves later?
W@P
Honorary Master
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Yes, I fill my kid's TFSA with the full amount every year. For both of them. They won't ever get to use the tax-free savings because by the time they get access to the account it has already reached its limit for contributions.
And that’s good for them. The longer the money stays in the TFSA the better. No ambiguity, no confusion, a kid who turns 18 and has the TFSA maxxed out is in a financially better place than a kid who doesn't*.
If they start working and have R3k a month to save, they can put it into a regular investment account, no problem.
*only caveat is that they must be smart enough to not withdraw from their TFSA.
No, her account would be maxed out if the current limit isn't changed. But assuming she sets it aside she will enjoy many years growth of a fully funded TFSA.
Sideshow Bob
Honorary Master
True. I wonder if max limit would be closer to 800K in 14 years time. I suppose it comes to personal preference. I prefer keeping contribution option open for my son as there are many other ways for us to fund him/his university studies etc.
Yes I wouldn't think of it as a way to fund university at all, but a long-term investment for his future. Of course, one never knows if a kid is going to be responsible at all, and he'll have access to the money at 18.
This may help out:
University Education For R500/Month
