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Every Canadian wants to enjoy a fruitful retirement.

Every year Canadians line up to direct their savings toward retirement plans within their pensions and RRSPs. After all, these are very good ways to maximize personal tax benefits and invest more than they likely would have been able to without these available benefits.

But, little do these disciplined investors know that an enormous tax liability is building within these accounts. . . and it is unavoidable.

You see, even if you don't require any income from your registered savings within the first few years of your retirement, at the magical age of 71 Revenue Canada is scheduled to begin taking its cut.  And, their share can be substantial.  

Beginning at age 71, Canadians are forced to withdraw or “de-register” their savings at an increasing rate each year until they reach age 80.  This causes often a forced and unnecessary taxation on the assets you have accumulated throughout your entire lifetime. 

There was no way around this unfortunate destiny . . . until now

In 2009 the Government of Canada launched a mysterious thing called the Tax Free Savings Account (TFSA). The major difference between TFSAs and RRSPs is you do not receive a contribution “tax-deduction” for contributing. But, unlike their RRSP counterparts, all withdrawals from a TFSA are 100 percent tax free! 

The most underrated part of the TFSA is it also allows Canadians to grow their investments completely tax free forever:  Tax-Free growth as well as withdrawals.   

Why is the TFSA so important to those approaching retirement? 

Because those who have taken advantage of this opportunity and have built up adequate savings within their TFSA's now have the opportunity to take advantage of a strategy to make their RRSP. . . .



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What if there was a way to transfer your taxable assets from your RRSP to your TFSA with zero tax consequences? 
the tfsa maximizer strategy:

The TFSA Maximizer Strategy is built for Canadians who are growing increasingly worried about the inevitable forced taxation on their registered and pension accounts. 

This innovative strategy uses the available equity within your home, cottage or investment properties to slide your registered assets into your TFSA completely tax free. Therefore, you not only can take advantage of the tax deductions going into an RRSP, but may also enjoy the tax-free withdrawal from the TFSA. 


1.   How do you transfer more than $6,000 maximum per year into the TFSA?  

Recall that the money flowing into the TFSA is not a contribution, but rather interest earned within the TFSA itself.  Because the TFSA owns the Mortgage Investment Corporation shares (MIC) it earns the prescribed rate of interest (15% in the video example) which is earned tax free. This is not a contribution but rather interest earned within the TFSA.  Our clients within this strategy are still eligible, and always advised, to continue to make maximum contributions to their TFSA each year.

2.   What is the risk that CRA will not allow my interest deductions within this strategy?

This strategy follows 3 very basic rules clearly outlined by CRA.

1.  Money is withdrawn from RRSPs, RRIF's, LIF's, etc. are taxable as income within the year the withdraw occurs.

2.   Mortgage Investment Corporations are eligible to be held within registered accounts within Canada.  All eligible MIC's are registered beforehand with CRA therefore guaranteeing their approval.

3.    Interest paid for the purpose of borrowing to investing into assets that have the potential to pay income is considered a tax-deductible expense.

The likelihood of a review of the respective deductions is very high, however, with proper planning and accounting the review process should be simple and efficient with the proper advice.

3.    What are the risks within the Mortgage Investment Corporation (MIC) ?

The mortgage investment corporation (MIC) used within this strategy are of the highest security within the financial industry.   This is because the MIC itself is not used for business, leverage, or development purposes.   It is strictly used by the individuals within this strategy whose payments are being funded via their
RRSP withdrawals.   Also, the mortgages are considered double collateralized, meaning that should a borrower ever decide to default on their mortgage, the MIC will simply redeem their shares and call the loan outstanding.  And because it is backed by both the registered assets (shares) and the property itself it has double the protection of other traditional MIC's.

5.   What are the costs to participate in this strategy?

There are two costs involved within this strategy.  The MIC itself charges an initial set up fee of 1 - 2% depending upon the quality of the mortgage structure and property used as collateral.   There is also a 1 - 2% annual interest cost for managing the cash flows within the strategy on an ongoing basis.  Both of these fees are tax-deductible.  However, it is important to note that the initial set up fee is charged at the conclusion and only once you have received the full benefit of the strategy.  This is important, as unlike other financial strategies, it ensures you are able to continue to compound your wealth and take advantage of the time value of money throughout the entire strategy.

There are also investment management fees associated with managing the assets that are 'borrowed to invest'.   This ranges between 1 - 1.25% depending upon the level of assets and is also a tax-deductible expense because it is for management of non-registered accounts.   Investment management fees are paid directly to Precedence Capital and Gravitas Securities.

6.   Who qualifies for this strategy?

Our regulators restrict this strategy to only accredited Investors. By definition, and accredited investor is someone who has $1,000,000 of investable assets, or $200,000 of earned personal income, or $300,000 of earned family income.   There are many different ways in which a client can qualify as being accredited.   For example, pension assets play a part in this calculation, as well as other business assets. Should you have any questions about the qualification for your family we are here to help.

7.    I'm interested in the strategy, however I do not yet qualify. What are my options?

This is probably the most important question!  Because so many Canadians may not yet qualify, it is important that we outline what options they have.   The key is to effectively grow both your registered assets and wealth overall so that you can maximize your return on investment and reduce your taxes as much as possible.  Many Canadians choose to work directly with our firm to ensure that they have the best possible chance to take full advantage of this amazing strategy as soon as possible.   Visit our "Planning Process" and "Investment Management" pages to learn more about how we can help maximize your wealth.

9.    How does this affect my accounting and tax filing each year?

As with any sophisticated tax strategy, it is vital to ensure you have accurate and proper accounting.  That is why Precedence Private Wealth created its own tax advisory and accounting division internally.  This helps ensure that there is a fully integrated and efficient approach to match your tax strategies with the proper accounting and filing.   Also, for clients with over $750,000 invested with Precedence Capital and Gravitas Securities, we cover the cost of your personal tax filing!  In addition to that, there are never any additional costs for our clients should their be a future review or audit conducted by CRA.

Discover More Strategies

Tax Deductible Mortgage Strategy
Tax Maximizer Strategy
Risk Parity Investment Strategy

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