27 March, 2019

Using RRSPs and TFSAs towards your financial goals.

Everyone has different investing methods and investment plans. Some people will begin investing as soon as they’ve graduated, while others start putting money aside when they’re more established in their careers. For some people the focus of their financial plan is retiring early, and others love their jobs and want to keep working for as long as they can full or part-time, some look forward to puttering around their gardens in their retirement years, while others plan on seeing the world.

 

No matter where you fall in this spectrum of possibilities, saving for your future should include taking advantage of both a TFSA and an RRSP. A Tax-Free Savings Account (TFSA) allows the growth generated by your investment to be as the name suggests tax-free. On the other hand, a Registered Retirement Savings Plan account (RRSP) holds your savings while offering a variety of other tax advantages.

 

Knowing which one to contribute to, or using both, comes from understanding your investment approach and examining your personal goals.

 

As you assess the different advantages between the two accounts, an important detail to note is an increase in the 2019 TFSA contribution limit. The annual limit has been raised from $5,500 in 2018 to $6,000 for 2019. This means your 2019 TFSA will give you an additional $500 in tax-free savings.

 

Our helpful TFSA and RRSP infographic offers an easy-to-compare snapshot of the benefits of both a TFSA and an RRSP. It can help you assess the differences between the two accounts and decide which one (or a combination of the two) is more beneficial for your individual needs. This side-by-side review also explains age restrictions, annual contributions, and taxation and withdrawal rules.

Call me to discuss your unique financial goals and

we can work together to develop an investment plan that’s just right for you.

Disclaimer: This blog post is for informational purposes only and is not and should not be construed as, professional advice to any individual. Individuals should contact their IPC Advisor for professional advice regarding their personal circumstances and/or financial position.