For US Tax reasons my wife does not have a TFSA. However, the Withdrawal Optimizer insisted that she have a TFSA account in order to run. So I created an account with a zero balance. I also made it the lowest priority for Deposits and Withdrawals with a Minimum of $0. However, when I run the Withdrawal Optimizer, it is putting funds into my wife’s TFSA which, of course, I don’t want it to do. Is there a way that I can stop it from doing that?
Ouch, that’s a tough one. What you did was good, but the Withdrawal Optimizer algorithm creates its own AUTOMATIC deposits/withdrawals and ignores your Priorities. That’s kind of the point of the Optimizer. Let me look into it to see if I can remove the requirement for the TFSA, or at least give you the option to if the holder is a US citizen. Strictly speaking the algorithm does not require a TFSA, but for most Canadians it is so advantageous to have one (for both spouses), that I kind of force it on people. I did not think about the tax problem for US citizens. Removing it from my implementation of the algorithm might also not be trivial.
I’ll be in touch,
Elisabeth
I have finally addressed the issue of not letting you run the Withdrawal Optimizer without a TFSA.
For optimizing to make any sense in the first place you need at least two of the three types of accounts (TFSA, TDA, and Non-registered), or there is no optimizing to be done. This is true for each spouse (as they are actually optimized individually). The app still requires that, but no longer requires one of the accounts to be a TFSA, you can delete your wife’s TFSA.
If no TFSA is set, the Optimizer sets the TFSA room to 0 in in all years so no deposits are ever made to it, and will only use the Non-registered account instead if it really needs to deposit excess RMDs so you truly just get optimization over the two accounts (TDA and Non-Registered).