Canadian Seniors will receive a one time covid-19 relief payment this week as announced by the government earlier in the week. The goal is to help seniors curb rising costs for things such as grocery deliveries and prescriptions. During this pandemic, seniors have been one of the hardest groups affected. This payment is one way that the government wanted to lightened their load. This one-time payment is tax free.
Canadian Seniors Receive Covid-19 Payment Relief, How Much?
Canadian seniors can receive up to $500.00 in a one-time payment from the government. Here’s the breakdown from a recent article below:
“Any senior who is eligible for the Old Age Security (OAS) pension will receive a $300 payment, and an additional $200 is being sent to seniors eligible for the Guaranteed Income Supplement (GIS).
The federal government estimates there are currently 6.7 million seniors who are eligible for the OAS pension and 2.2 million who are eligible for the GIS. These payments are set to total $2.5 billion.”
Canadian Seniors Receive Covid-19 Paymet Relief, When and How?
The payment is directly made to any senior who is eligible. No application is needed to apply. Here are the payment details from the same article:
“Seniors who reside in Canada can expect to receive the payment by direct deposit or cheque this week, whereas seniors who reside outside Canada can expect this one-time payment in July for those on direct deposit, or by cheque with delays given international postal disruptions,” said the government in a statement.
For Canadian seniors, any help is good as they have been hit hard by COVID-19. As a result, they have to take extra precautions to stay safe. This has resulted in taking on a greater financial burden with limited income for many. Because of that, Canadian seniors will gladly accept the covid-19 one-time payment as every little bit helps.
Should I open a TFSA? It’s an interesting question as it seems to be all the rage right now. It seems like an easy way to save money. However, before getting a TFSA, you should know a few things about it first.
What is a TFSA?
It is a tax free savings account. This means that whatever money you put in it, the interest, dividends and capital gains earned in this account is tax free for life. You can withdraw money from it at anytime and the money withdrawn is tax free!
What can I have in a TFSA?
You can have a wide range of investments inside of a TFSA such as:
securities listed on a designated stock exchange
guaranteed investment certificates
certain shares of small business corporations
Advantages of Opening a TFSA
The biggest advantage is that any interest, capital gains or dividend income earned is tax free! As a result you can grow your money faster than in a typical investment or savings account as income earned in these accounts are subject to taxation when either earned or when money is withdrawn. Another advantage is that you can withdraw from it anytime which gives flexibility. Finally, anyone can set up a TFSA as you do not need to be earning income to have one.
Disadvantages of Opening a TFSA
One of the biggest disadvantages is that if you use it as a savings account, the interest rates are not very high. For example, if I want to put money in a savings account within a tax free savings account, the interest I would receive would be about 1% per year. If a put it into a high interest savings account, I can earn some where in between 1.5 to 3% which is a bit higher and can earn a higher rate of return even after the interest is taxed. Another disadvantage is that you can only invest a certain amount every year. For example the TFSA limit for 2019 was $6000.00. However, if you have never invested in it since its beginning then you could possibly invest up to $63500.
Should I Open a TFSA?
Yes you should! The only reason you might not open one is that you would be only using it as a savings account where the interest rates would be low. However, if you do not need to use the money in the foreseeable future, you might look at putting the money into a GIC where you might get a little better interest rate and there is no risk. But if you are an investor and you do not mind the risks involved investing in securities or mutual funds, then opening a TFSA is an absolute must as you will grow you money faster. So open a TFSA and use it correctly and you will not be disappointed!