Calgary Accountants

TFSA

• Money is easy to access and withdrawals are tax free.
• Contributions to a TFSA are not tax deductible.
• Monies earned by the TFSA (dividends, capital gains, interest earned etc.) are tax free.
• The contribution limit is fixed and does not depend on your income. This can be beneficial for lower income earners because they will not be restricted by their income.

RRSP

• Contributions are tax deductible.
• With a few exceptions, money typically stays in an RRSP until retirement. It is more difficult to access than a TFSA.
• Withdrawing from an RRSP needs to be strategic; too much income during retirement could make you ineligible for old age pension.
• RRSPs provide tax deferral, so you will pay tax on amounts withdrawn from the RRSP.
• Your RRSP contribution limit is based on a percentage of your income

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