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Practical tips about RRSP and TFSA

Practical tips about RRSP

  • RRSP age limit is 18 to 71 years.
  • If a person earns over $50,000, then RRSP is a good choice.
  • RRSP is better for long-term saving goals.
  • RRSP is even more valuable if you receive a matching contribution from your employer.
  • RRSP can be used to help buy your first home for a down payment.
  • RRSP is an excellent long term retirement chassis.
  • RRSP doesn’t provide tax-free withdrawals.

*Last date for making RRSP contribution is 1st March this year for the 2020 tax year.

Practical tips about TFSA

  • TFSA’s minimum age is 18 with no maximum age limit.
  • If a person earns under $50,000, then TFSA is a good choice.
  • TFSA is very good for short or medium-term saving goals or if you are over 55.
  • TFSA has higher flexibility in terms of the needs that may arise in future.
  • TFSA has no plan focused on “First Time Home Buyers.”
  • TFSA account is not a retirement planning tool, though it can be used for it.
  • TFSA provides tax-free withdrawals.
  • You can benefit from using both an RRSP and a TFSA to ensure a comfortable retirement.