The Best Strategies for Your RRSP and TFSA When Money’s Tight
Whether you have limited funds to invest or need to withdraw some hard cash, explore a tax-friendly solution.
If you have limited funds this RRSP season, and you can’t maximize both your RRSP and TFSA contributions, you likely will have to choose which plan is best for you this year. Both an RRSP and TFSA allow you to invest in variety of things, including GICs, mutual funds, bonds and equities, and both may allow you to effectively enjoy tax-free investment income while the funds remain in the plans. But there are two main distinguishing factors.
The first is the tax rate differential for RRSP contributions and withdrawals.
But the second, often neglected, differentiating factor between an RRSP and a TFSA is the additional flexibility that comes from a TFSA.
Read the full article here: Financial Post
From Jamie Golombek