Which is Better? TFSA or RRSP? // Canadian Finance
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- เผยแพร่เมื่อ 26 ก.ค. 2024
- Trying to figure out whether to use a Tax-Free Savings Account or a Registered Retirement Savings Plan? In this video we show you how you can figure out which is one is better and when.
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Intro (0:00)
Basics of TFSAs and RRSPs (0:27)
Comes Down to Goals & Tax Perks (1:58)
Poorly Timed RRSP Withdrawals (3:00)
Using Both (3:51)
Which is Best for Retirement? (4:14)
Links:
RRSP Explained video: • RRSPs: Are They Even W...
TFSA Explained video: • TFSA Basics and How To...
TFSA vs RRSP Calculator: ativa.com/tfsa-vs-rrsp-calcul...
DISCLAIMER: The content and opinions on this channel are for informational and educational purposes only and none of it is (nor is it intended to be) investment advice. It is our firm position that everyone has a unique situation and should seek professional advice on how best to navigate it. Rhys Martell is a Chartered Investment Manager (CIM), a Fellow of the Canadian Securities Industry (FCSI), a Qualified Associate Financial Planner (QAFP) and more. However, he is not registered to provide investment advice and does not provide specific recommendations. Those looking for specific investment advice should seek out a registered professional. Rhys Martell is not responsible for any investment decisions taken by anyone other than himself.
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Also thank you for having the time to make us more aware of our money.
The other thing to consider is your expected retirement income. If your tax bracket will not be going down in retirement a TFSA makes a lot of sense.
Thank you, I'll have a look.
Love the advice and delivery Rhys!
Thank you Arsalan! And by the way, it was great to meet you. Really enjoyed our meeting :)
I just sub as per my brother's advise to follow you and learn from you.
Looking forward for your many insightful topics.
Thank you in advance.
New scribe. Really like your videos! Keep them coming.
Thank you Reg! Will do :)
New sub here. Ive been catching up and watching all your videos. Really great info. Thank you!
For this one, If one can max both accounts, whats the best type of stocks or ETFs for each?
And thank you! I’m a huge fan of ultra diversified ETF portfolios. Keeps the cost down, keeps it simple, and eliminates human error. I’ll be doing a vid on that shortly :)
Yup, your retirement income and tax braket makes a huge difference. Then there's the pension amount, the size of your RRIF, when you want to draw your RRIF or TFSA. People say your biggest purchase in your life is a house. Nope, it's your retirement. You can sell your house but your retirement requires years of planning and generally, you can't go back. Listen to good advice but always be aware of your future needs. Siri and Alexa can't help you. Channels like this can.
Completely agree and I have both but as I get closer to retirement, tax free income from a TFSA is super important for most people. Depending on your income, and lets face it, most Canadians have a much lower income in retirement, It could be the difference between qualifying for different programs such as GIS, for example. Grants for home updates etc. are also income tested. You could technically draw a 50k salary from your TFSA (yes, unlikely) and still qualify for full GIS and other programs. All that said, for a higher income worker, I like the idea of RSP contributions with the refund rolled into a TFSA. Its crucial that as part of your retirement plan, that the refund be rolled back into that plan and not spent on other frivolous things
Well said!
Very interesting videos! From what you say here, what i understand, for people having a high income tax % and are staying in Canada (ex. Quebec) for just some years, the best would be to do RRSP if they will be capable to leave the country at the beggining of a year ( when your income has not been much)?
Thank you! I’m not entirely sure what you mean by timing withdrawals for when you leave Canada, but you are definitely on the right track. The higher your tax bracket the more appealing RRSPs are because the tax deductions get larger. And when you have very low or no income years, it’s a great time to pull money out of your RRSP as the tax hit will be little to nothing.
I think i would do RRSP and the money or refunded amount will he invested to TFSA..
Interesting video. Have an RRSP and TFSA for retirement but a different for shorter term goals like renos, vacations, etc. Don't see this aspect of using a TFSA covered much. You covered contributing to RRSP and reinvesting tax return into RRSP but what about strategy I use? Contribute to RRSP and contribute tax return to TFSA. Seems to me to be the better option but curious on if you thing that is true. Good videos and info. Cheers
Thank you! And depending on your situation, your idea could be an excellent idea. I think 90% of the battle is making sure you use the tax deductions wisely.
I stick with the TFSA and cashed out of the RRSP and invested it else where. Didn't like getting hit when the money was needed and moved. It's not a comfortable thing to go through. We want to move away from these hits the Government makes and just let our money grow and getting rid of the RRSP was, in my opinion, breaking away from Government Control, in that area and gives me more control and flexibility with my money.
I hear you. I do love the tax deductions from RRSPs but I really don’t like how it limits options.
Oh I have Subscribed. Would you advise a client to invest the RRSP tax refund into a TFSA instead of investing the refund back into the RRSP.?
100% depends on your situation. Sorry for the lame, politician answer, but it's true :)
@@wellbuiltwealth Love the TRUTH. That's why I'm here. Thx.
I have a question about RRSP'S. I AM 65 AND WILL PROBABLY work till 71 where my RRSP will roll over to the RRIF. Will I be taxed as well like the rrsp when I take mo ey out,??. I am deciding between tfsa or rrsp.
You bet. All withdrawals from a RRIF are taxable just like withdrawals from a RRSP. We have a full video on that topic if you like.
Theres really no debate tfsa are the way to go ...tax free? self explanitory...90;000 at 5.25% is 4,725 a year...tax free....D o it for 10 years...47,250 free money...
I think financial experts such as yourself, need to focus more time on these videos on reinvesting tax refund vs spending it if investing in RRSP. The vast majority of clients get that tax refund and spend it. Regardless of income level, if you do that RRSP is by far the worst option to invest in!!
You mean like I did in this video?
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Yes…but even more time. I still don’t think people understand that even based on the small amount of time you spent on it… but great advice!!