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2013 the TFSA Contribution Limit Increases to $5500

On November 26, the Harper government announced that starting January 1, 2013 they will increase the Tax Free Savings Account (TFSA) limit by $500 to $5500. About 30% of Canadians who have a Tax Free Savings Account max out their annual contributions, so this news should be welcomed by these TFSA maximizers.

This is the first time the government increased the TFSA contribution limit. Upon the initiation of the TFSA, the government announced that they would make the $5000 annual contribution limit indexed to inflation using the Consumer Price Index (CPI) data from Statistics Canada. The inflation amount is rounded to the nearest $500. In 2013, this is the first year that the amount exceeded the threshold, hence the increase to $5500 for the annual Tax Free Savings Account contribution limit.