TFSA vs RRSP: How to decide between the two + MORE Mar 30th

All about Retirement Planning in Canada. Learn the ins and outs and get the latest news.
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 registered retirement savings plan

Making sense of the markets this week: July 3 + MORE Jul 6th

While regular “Making sense of the markets” columnist Kyle Prevost is on vacation, Dale Roberts and I are filling in. Dale’s piece ran last week, and it’s my turn this week. Dale will return next week, after which a well-rested Kyle will resume.  Speaking of Dale, this week he wrote .... More »
 registered retirement savings plan

What it’s like to work with a financial advisor + MORE Apr 6th

If you’re like many Canadians, you’re probably weighing working with a financial advisor. Maybe you’ve just gotten married, started a business, expanded your family or come into an inheritance, or you’re planning your financial future as you approach retirement. A financial advisor can be.... More »
 registered retirement savings plan

Do bonds still make sense for retirement savings? + MORE Apr 27th

Now that it’s clear interest rates bottomed some time ago and are well on an upwards trajectory, we’re seeing headlines declaring the “death of bonds.” Notable was the Globe & Mail article by veteran columnist and author Gordon Pape, announcing he was “getting out of bonds.” W.... More »

U.S. withholding tax in an RRSP for Canadians + MORE Aug 3rd

I have EPD stock in my RRSP for their dividend payments (about 7%). What a surprise I had—even when in an RRSP—I had to pay about 30% tax on these dividends. EPD is registered in Louisiana. —Wanda How much is withholding tax on U.S. dividends? I am going to provide a brief summary of U..... More »

Can I withdraw from RRSPs to pay bills? + MORE Apr 20th

What are the cons to withdrawing RRSP savings of $25,000 to pay off some unexpected bills I have incurred?—Anonymous Withdrawing RRSPs when you’re not retired Ahh, the unexpected bills. Anonymous, I’ll give you my initial thoughts first, and then I’ll review the cons of withdrawing .... More »
One of the most common questions out there is whether to invest in a registered retirement savings plan (RRSP) or a tax-free savings account (TFSA). Both will help you save, and save on taxes, but each works in a different way. Understanding how these accounts work will help you decide which is best for your current needs—and even when to use them in tandem.
What is a TFSA?
A TFSA (or tax-free savings account) is a registered investment savings account that any Canadian resident, aged 18 or older, can use for straightforward savings or to hold investments. It can store things like exchange-traded funds (ETFs), guaranteed investment certificates (GICs), bonds, stocks and cash.
Any income earned in the account—even when it is withdrawn—is tax-free. This means any interest, stock dividends and capital gains earned in your TFSA aren’t subject to income tax. However, your TFSA contributions won’t reduce your taxable income like RRSP contributions will.
There’s a limit on the amount of money you can contribute to your TFSA is annually…

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I’m quitting. Should I keep my pension or take a lump-sum payout?It depends on your age and whether you’re good at managing your money, expert says.

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