2023 TFSA dollar limit confirmed at $6,500

[raffadalbo]

Edit for clarity: confirmed by me, not the government.

Note: on the mobile app, you may need to swipe to the right on the table to see all 7 columns.

The average CPI for all items for October 2021 to September 2022 was 148.842 (source), representing an increase of 6.3% over the previous 12-month period. As a result, the indexed TFSA dollar amount is now $6,550.95, which is rounded to the nearest $500 to arrive at the $6,500 TFSA dollar limit for 2023. The lifetime limit for someone who was 18 in 2009 would be $88,000. See my calculations in the table below.

For those that are curious, there would need to be an increase of 3.1% for the following 12 months (October 2022 to September 2023) in order for the 2024 TFSA limit to be $7,000.

Edit for the source that September CPI is what’s used by the government: Income Tax Act section 117.1: “the Consumer Price Index for the 12 month period that ended on September 30 next before that year”; the definition of TFSA dollar limit in subsection 207.01(1) points to this.

Further edit before anyone asks: as of 2016, the dollar limit is indexed for inflation retroactively back to 2009, but until 2015 the amount was set by the government and not actually automatically adjusted for inflation.

Year
Base Amount
CPI Average
Adjustment Factor
Indexed Dollar Limit
Rounded to $500
Cumulative Room

2009
$5,000
113.558
-
N/A
N/A
$5,000

2010
$5,000
114.208
1.006
N/A
N/A
$10,000

2011
$5,000
115.817
1.014
N/A
N/A
$15,000

2012
$5,000
119.067
1.028
N/A
N/A
$20,000

2013
$5,500
121.392
1.020
N/A
N/A
$25,500

2014
$5,500
122.533
1.009
N/A
N/A
$31,000

2015
$10,000
124.567
1.017
N/A
N/A
$41,000

2016
$5,000 (indexed)
126.150
1.013
$5,559.31
$5,500
$46,500

2017
$5,000 (indexed)
127.933
1.014
$5,637.14
$5,500
$52,000

2018
$5,000 (indexed)
129.850
1.015
$5,721.70
$5,500
$57,500

2019
$5,000 (indexed)
132.717
1.022
$5,847.57
$6,000
$63,500

2020
$5,000 (indexed)
135.283
1.019
$5,958.68
$6,000
$69,500

2021
$5,000 (indexed)
136.692
1.010
$6,018.26
$6,000
$75,500

2022
$5,000 (indexed)
139.983
1.024
$6,162.70
$6,000
$81,500

2023
$5,000 (indexed)
148.842
1.063
$6,550.95
$6,500
$88,000

 

[resjudicata]

@raffadalbo Let me catch up to the $80k contribution room I’ve already got

 

[fid3ll3]

@resjudicata I continued to rent a dumpy apartment for 6 years after I got a 'real job'. Helped a lot.

I never did agree with the $10k year though, it's just such a wealth transfer to the $60-$150k earning crowd.

 

[kevin76]

@fid3ll3 You think someone making 60k a year so brining home like what, 40k can put aside 10k a year in a TFSA?

 

[fid3ll3]

@kevin76 I was, easily, plus another $5k in RRSP.

Take home would be $45.6k in Alberta, $3800/mo.

My living expenses in 2015 were about $1800 per month, so saving about $2000 per month.

 

[kevin76]

@fid3ll3 That's amazing, but I doubt you are in the majority with a >50% savings rate. Especially 7 years later with the higher cost of living, especially rents.

 

[resjudicata]

And this is why the conservatives (temporary) increase of the TFsA to $10K was bad policy and basically just a handout to the upper-middle and upper classes.

 

[jemstone]

@resjudicata 10k annually is $830 a month. That is very doable, especially for people in relationships/living together. And even if you can’t deposit that amount right away in your life, the space doesn’t go away so you can add to it later on in life as you earn more money annually

Also the impact of saving some tax dollars on investments of that amount is going to benefit a lower income individual more than a rich person (I mean like as a % of their overall income and net worth it will be more impactful)

 

[stevish74]

@jemstone There is academic research on the increase of the TFSA limit to $10k and it unquestionably benefits the upper class so much more that it is just terrible policy. You'd be shocked at how much tax savings a wealthy person can get by putting $10k/year into their TFSA from the day they turn 18 until the day they die (because they don't need to withdraw the money... they have more than they need outside their TFSA) plus $10k/year for their spouse plus $10k for each of their children from the time they turn 18. It's a MASSIVE handout to the wealthy and the rest of us would have had to pay for it because the government needs tax revenues one way or another.

This is coming from someone that would absolutely benefit from a higher TFSA limit. It's just not worth shifting the tax burden away from the wealthy and on to everyone else.

 

[gzomk]

@stevish74 Could you link to the research?

 

[carlagrimes]

@raffadalbo well it's bound to happen anyway (with $6,250 being the limit to be rounded up to $6,500). but interesting that the index is already over $6,500. a 3% inflation next year will bring 2024 limit to $7,000.

 

[gorphean]

@carlagrimes I thought they didn't round, they took a floor?

 

[carlagrimes]

@gorphean no, they round to the closest $500. see OP's table for 2019, it's $5,847.57 but then rounded to $6,000. same with 2020.

 

[gorphean]

@carlagrimes Good to know thanks

 

[resjudicata]

@raffadalbo Another $6,500 for me to lose on the Stock Market

 

[twigagiraffe]

@resjudicata Fellow degen !

 

[katiebugsb]

@twigagiraffe Regarded

 

[davidcn]

@raffadalbo Thanks for all the good work you do here. Why do people have such a hard on for technically being "right"? Of course this isn't officially "confirmed". But the likelihood of this being the correct outcome is like 99.99999%. It's practically a certainty.

Some people around here act like you're committing theft if you plan around $6,500 TFSA limit in 2023.

 

[raffadalbo]

@davidcn Honestly I don’t know. It’s not like I’m being paid to provide this information or have anything to gain at all by posting correct or incorrect info… I think some people just enjoy arguing for no reason.

 

[prototype1911]

@raffadalbo No we don’t/s