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RRSP and TSFA Investments

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RRSP Accounts

Registered Retirement Savings Plan (RRSP) is a program regulated by the federal government of Canada, offering tax advantages to help Canadian residents accumulate financial wealth, through a wide range of investment instruments, in order to provide financial security and income during retirement.

Most people have heard of RRSP’s although not everyone is sure what they are or how they work. Some people think of RRSPs as an investment and will say ‘ I bought an RRSP’ or ‘I don’t like RRSP’s because they lose money’. RRSPs are just registered savings accounts, a baskets to hold investments where contributions are deducted from your taxable income and growth is sheltered from income tax until withdrawal. Sometimes  RRSPs are promoted  as the ‘must have’ or ‘be all’ in tax savings and retirement planning. Sometimes clients are encouraged to borrow to fund RRSP contributions although it may not be in the best interest. Clients should have consultation with a professional  to determine if RRSPs are the best course of action for their individual situation.

What to invest inside an RRSP
There are are many eligible investments qualified to be included in a RRSP basket.

Click here to see qualified investments

What is a TFSA?

Since 2009, a tax free savings account (TFSA) is a way for individuals who are 18 years or older and who have a valid Canadian social insurance number to set money aside tax-free throughout their lifetime. Contributions to a TFSA are not deductible for income tax purposes. Any amount contributed as well as any income earned in the account (for example, investment income and capital gains) is generally tax-free, even when it is withdrawn. Administrative or other fees in relation to a TFSA and any interest on money borrowed to contribute to a TFSA are not tax-deductible. We believe that every person that is eligible should be maximizing their TFSA  contribution room. Currently, that is $43,500 per person and $93,000 for a couple. Invest in a 8% yielding investment and you have $7,480 Tax Free Income.