A Mother’s View on Increased TFSA Limits

By Michael Drak,

Special to the Financial Independence Hub

“I want you to get up right now. Sit up – Go to your windows – Open them and stick your head out and yell – I’M AS MAD AS HELL AND I’M NOT GOING TO TAKE THIS ANYMORE!

Then we’ll figure out what to do about the depression and the inflation and the oil crisis. But first, get up out of your chairs, open the window, stick your head out, and yell, and say it I’M AS MAD AS HELL, AND I’M NOT GOING TO TAKE THIS ANYMORE!”

The above scene is from the 1976 film, Network, and my mother thought it might be an appropriate response to Jonathan [Chevreau]’s recent article on TFSAs:  “Memo to Liberals: lots of older middle-class Canadians have $10,000 TFSA capital “lying around.”

Here is her story.

‘I don’t have to tell you things are bad. Everyone knows things are bad.”

My mother currently resides in a retirement home and is able to afford the hefty monthly rental payments via a combination of CPP/OAS and unregistered savings. A large chunk of her unregistered savings was generated via the tax-free sale proceeds of her principal residence

The challenge that she and many of her friends are facing is that in the current low interest environment her savings do not generate sufficient cash flow to meet her monthly obligations. This means that she is forced to start drawing down capital to cover the shortfall. The sad truth is that as my mother’s health continues to deteriorate she will require enhanced care at the retirement home which in turn will result in an increased reduction in capital. And how long that capital will last is anyone’s guess.

So when it was announced that the annual contribution limit was increased to $10,000 my mother along with many of her friends at the home were elated to know that finally some help was coming their way. But of course good things these days never seem to last and it wasn’t long before they heard that if elected the liberals intended to reverse the amendment and go back to the old limits. For some reason known only to them they just didn’t seem to get it or maybe didn’t want to get it.

So you’ve got to get mad. You’ve got to say:

“I’m a human being, dammit! My life has value!”

My mother constantly worries about running out of money and being a proud person of Irish descent who has always earned her way she does not ever want to become a financial burden on her family nor the government for that matter. That’s just the way she was raised. So now she has a new problem that she has to deal with and is losing some sleep over. Does she vote for the party that will save her money or does she go with her heart?

So please excuse me while I go open a window for my mother so she can stick her head out and yell ‘I’m as mad as hell, and I’m not going to take this anymore!

Drak 2014Mike Drak is part of the Komitas Mastromartino Wealth Management Group at RBC Dominion Securities, based in Toronto. He is currently writing a book about some of the themes mentioned in the above blog and at the Financial Independence Hub in general. He can be reached at michael.drak@yahoo.ca.


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