Its official, the TFSA annual contribution limit has been announced for 2021! The limit is $6,000, matching the amount set for 2019 and 2020.
Come January, the cumulative contribution amount since 2009 will be $75,500.
| Year | Amount |
| 2009, 2010, 2011, and 2012 | $5,000 |
| 2013 and 2014 | $5,500 |
| 2015 | $10,000 |
| 2016, 2017, and 2018 | $5,500 |
| 2019, 2020 and 2021 | $6,000 |
How is the TFSA annual room limit decided? The amount of $5000 is indexed to inflation and rounded to the nearest $500. This year with inflation being quite low, this threshold was not met and the amount has stayed the same for 2021.
In 2015, when the annual limit was $10,000, the Conservative government decided to change how the limit was set. They wanted to set the limit to $10,000 every year regardless of the effects of inflation. At the end of 2015, when the Liberals were elected, the contribution limit was reverted back and calculated by using the same rules that are in place today.
Below are two blog posts I have previously written that highlight the benefits and importance of TFSAs. I encourage you to give them a read!
TFSA Part 1 – The Power of Compounding
TFSA Part 2 - Tax Free Income & Tax Free on Death
You can also read more about TFSAs on our Tax Free Savings Account page you can find under the heading: 'Quick Facts.'