Is it better to contribute to a TFSA or an RRSP?

While the two savings plans have different features and benefits, they are designed to complement each other. As a Government of Canada brochure states, while an RRSP is primarily intended for retirement, “The TFSA is like an RRSP for everything else in your life.”

Generally speaking, whether it is better to contribute to a TFSA or an RRSP depends on two variables – your tax rate when you contribute funds and your tax rate when you withdraw funds.

If you expect to be in a lower tax bracket when funds are withdrawn, an RRSP is probably a better investment.

If you expect to be in a higher tax bracket when money is withdrawn, a TFSA may be the better choice.

However, each individual situation is unique and other factors may come into play. Please feel free to give me a call to figure out a strategy that will work for you.

Until next time, continue to live for today, but be sure to plan for tomorrow!



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Aaron Fransen   CFP® , CHS, CPCA   |   CERTIFIED FINANCIAL PLANNER®, Investment Advisor   |   Suite 203 - 15350 34th Avenue, South Surrey, BC V3S 0X7   |   Tel: 604.531.0022