The case for a 'TFSA-first' strategy in retirement planning + MORE Mar 11th

It can be excellent as a primary way to build up your nest egg, and unlike the RRSP, it avoids later clawbacks

Canada’s government is the smallest it’s been since the Second World War, and that’s hurting its ability to provide services, says a new “alternative federal budget.”

The latest edition of the document — which the Canadian Centre for Policy Alternatives releases every year ahead of the official federal budget — calls for substantial corporate tax hikes, the closing of tax loopholes and the elimination of tuition fees.

“Federal total spending as a share of the economy stands at 13 per cent of GDP, its lowest point in the past 60 years,” states the document, released Thursday.

“The last time the government was this small we had no national health care plan, no pension plan, no guaranteed income supplement, no employment insurance.”

Falling corporate tax rates and growing tax evasion are to blame, and “the result has been a measurable withdrawal of public services and support programs upon which many rely,” the CCPA said.

The Place du Portage federal complex in Gatineau, Quebec, across the river from Ottawa…

OTTAWA – You might be feeling pretty good about that contribution to the RRSP account and may be daydreaming a little about how you’re going to spend the tax refund.
But investment experts say people should think twice before blowing that cheque from the government on a new television or a quick weekend getaway.
“What you have to remember is that it’s not actually a windfall, it is money that you’ve paid in taxes that you’re getting back for funding your retirement,” said Larry Moser, divisional manager for BMO Investorline.
He said people need a strategy for the money, whether it is investing it or paying down debt, depending on financial circumstances.
28 ways to pay less tax »
For those with high-interest debt, such as credit card debt, Moser says that would top his list for uses of a tax refund.
When making an RRSP contribution, people aren’t avoiding tax on their contributions, they’re only delaying it. The advantage comes from the tax sheltered growth and it is likely people will be in a lower tax bracket in retirement when they withdraw the money than when they earned it…

With interest rates below zero in real terms, big pension funds are on the hunt for things they can buy that behave like bonds. You can copy their behaviour.