TFSA or RRSP?

TFSA Information-TFSA vs RRSP?

That's the question many people are asking now that there are two plans and can't contribute to both.

Which plan should I invest in for retirement?

TFSA or RRSP?

You should have a better view to the answer to that question after you have read this TFSA informationarticle.

Unfortunately there is no straight forward answer to that question. It totally depends on ones circumstance.

To start, you must realize that a TFSA and RRSP are two different investment vehicles from a tax and savings perspective.

In the words of Gordon Pape, TFSAs are TEE plans which stand for taxed, exempt, exempt. This means that money going into the plan has already been taxed, but earnings within a TFSA are tax-exempt, as are withdrawals.

In contrast, RRSPs are EET plans which means they are exempt, exempt, taxed. Contributions are tax-free because they generate an offsetting deduction. Investment income earned within an RRSP is also tax-free. But all the money coming out is taxed at your marginal rate, regardless of its source.

That means that you will pay more tax on capital gains and dividends earned within an RRSP than you would if those same profits were generated in a non-registered account.

In the budget the Department of Finance included an example that suggested there is no after-tax advantage in using a TFSA vs RRSP for retirement savings. But the TFSA information in his book Tax-Free Savings Accounts, Gordon Pape illustrates in certain situations when TFSAs are clearly a better choice.

This TFSA News is what you need to know.

So with that said it does clearly come down to a person's situation in determining which plan is better to invest in for retirement and during retirement.

Gordon Pape does an excellent job outlining this with example illustrations of why which plan would be better.

Having or not having this information is like having more money or less money in your pocket at the end of the day.

This is how important this TFSA Information is to you.

For convince purposes I have supplied a link to his book which you can buy on Amazon directly below this article. All you have to do is click on the picture of his book.

The rules of the game you need to know to come out a winner. The TFSA information he supplies give's you those rules.

Get the knowledge to make it happen.