RRSP vs. TFSA – Which one to choose?
Canadians contribute to RRSP and TFSA annually. However 25% of the Canadians do not know the difference between the two. If you feel that you do not know, you are not the only one. Both have its own merits and will provide different results. Below is a comparative chart to identify which plan will be more suitable for you than the other:
After all this, which one is better plan for you? There is no clear answer to this. However, if you are able, maximize your contribution for both. RRSPs are suitable for retirement savings and ideal for high income earners. TFSA on the other hand offer more flexibility for withdrawals and therefore used for short-term life events and if funds are not needed, long term investment growth without having a tax burden on the gain.
Each person’s circumstance would be different and if you would like to further discuss which option is better for your specific situation, please feel free to call us for a no-obligation discussion. Please call us on 905 815 8442 Ext. 150 or email us at rakesh@rakesh.ca.
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