[Fisherman30]

I see you don't have any TFSA account. Why do want to invest $40k in non-registered account and pay taxes on your gain?

Because I have pretty much all of the money in my employer's savings plan going into a TFSA, which is about $25k/year, and that will have my TFSA room maxed out pretty quickly. Also, we might use this money for a downpayment on a house if the housing market experiences a correction, so I don't want to occupy all of that TFSA room, just to potentially use the money within the next year or 2 for a downpayment on a house.

 

[Gator13]

You should consider putting your surplus funds towards your mortgage. Speaking from experience, having no mortgage early in life does amazing things for your cashflow and ability to invest. Keep in mind that you have to service your mortgage with after tax funds. Good luck.

 

[londoncalling]

Not sure I follow your logic on the TFSA room. You would get the room back the year following withdrawal. I am struggling to find a situation where tax free money is better than taxed money.

 

[Fisherman30]

Not sure I follow your logic on the TFSA room. You would get the room back the year following withdrawal. I am struggling to find a situation where tax free money is better than taxed money.

Ah yes, true. So you think I should put the proceeds in a TFSA then?

 

[londoncalling]

I would say yes depending on what you intend to buy with the proceeds. I wouldn't want to put risky investments in my TFSA that I am anticipating needing in 2 years for fear of having to cash out at a substantial loss and losing the room. I am not saying you need to buy a GIC but the yield on a 2 yr GIC is better untaxed than taxed.