Retirement savings: an RRSP or a TFSA?
There’s a new kid on the block when it comes to saving for the future. So what makes the most sense now – contributing to your RRSP or to a Tax-Free Savings Account (TFSA)?
“It all depends on your income tax rate at the time when contributions are made, as compared to the rate during the withdrawal phase,” explains Chartered Accountant Kenneth Lancaster, Tax Partner with MacGillivray Hamilton.
“If the two rates are identical, then the TFSA is a preferred option because it is more flexible and withdrawals do not affect income-tested benefits.
