RRSP or TFSA: Which is Right For Me?
I've been asked this question by more than a few people. What's the difference between an RRSP and a TFSA and which is the right one for me?
The RRSP (Registered Retirement Savings Plan) is an investment vehicle
that allows the investor to defer income tax proportionate to the amount invested into the RRSP. The tax will be applied once the funds are withdrawn from the RRSP, ideally during retirement, in small increments and during lower income years.
that allows the investor to defer income tax proportionate to the amount invested into the RRSP. The tax will be applied once the funds are withdrawn from the RRSP, ideally during retirement, in small increments and during lower income years.
The TFSA (Tax-Free Savings Account) allows for non-taxable growth within the account.
Every situation is different and the best thing to do is speak with your financial planner and look at your overall financial situation to determine the best combination of these two investment vehicles to apply to your overall financial plan.
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