TFSA confusion: The myths that just won’t die Jun 25th

I’ve had clients ask if a dividend paid inside their TFSA counts as a contribution. Others think they lose contribution room when they make a withdrawal, or that a TFSA is only for short-term savings. These aren’t outliers; they’re everyday Canadians trying to do the right thing and getting tripped up by the most misunderstood account in the country.

Since its introduction in 2009, the TFSA has become a core part of financial planning. But despite its popularity, misconceptions abound—and they’re costing Canadians real money.

Below are the seven questions I field most frequently, each introduced with an anonymized client situation so you can see how the myth shows up in practice—and how to handle it.

1. “If my TFSA earns dividends or capital gains, do those amounts count as new contributions?”

Client scenario:Sarah holds $80,000 of the Vanguard All-Equity ETF (VEQT) in her TFSA…