Comments

  1. Hit the nail on the head with this post! I have spoken with a lot of Canadians who are in the lowest tax bracket possible and still contributing to RRSPs. Like you said, it’s probably a good idea if their employer has a matching program but outside of that, you are not gaining very much besides the actual gains on your investments inside the RRSP. With the TFSA being at the point where you can pretty much contribute $100 a week to it, I usually tell them to max this out first, and then contribute to RRSPs. It just makes more sense. Save up that RRSP contribution room for when you are in a higher tax bracket. This has multiple effects, one being you will receive more money back when you file your taxes, and secondly, you will actually have a net gain when you pull it out in retirement.

  2. This is a very informative post Sarah. I think that by knowing the ins and outs of these accounts it will allow people to understand and take advantage of the benefits that these accounts provide.

    For me personally, I always maximize my RRSP limit every year, then I would use the tax refund to maximize TFSA. Over a ten year period, these disciplined saving habits resulted in a net worth of over $1M. I would encourage all CBB readers to take advantage of these benefits.

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