Whether you’re just starting to think about retirement or you’re getting closer to retiring, saving more for retirement is smart.
If you're like most Canadians, an RRSP may be the first savings plan that comes to mind, but there's more you can do to save for your retirement.
Non-registered plans and TFSAs, in addition to RRSPs, can help you save money, preserve your wealth and minimize your taxes — both when you make your contributions and every year between now and retirement.
If you're interested in integrating one or more of these plans into your retirement savings portfolio, the table below makes it easy to compare and choose one, two or all three options based on your needs and investment goals.
Non-registered |
RRSP |
TFSA |
|
| Annual contribution limit | Unlimited |
Yes (based on earned income) |
Yes (no earnings requirement) |
Legislated minimum age to |
No |
No |
Yes – age 18 |
Legislated maximum age to |
No |
Yes 71 |
No |
Carry-forward of unused room |
n/a |
Yes |
Yes |
Tax-deductible contribution |
No |
Yes |
No |
Monthly penalty on excess |
n/a |
Yes |
Yes |
Tax-deferred/tax-free investment growth |
No |
Yes (tax-deferred) |
Yes ( tax-free) |
Taxable on withdrawal |
Taxable disposition |
Fully taxable |
Tax-free |
Withdrawals added to contribution room |
n/a |
No |
Yes |
Withdrawals impact federal income- tested benefits |
Yes |
Yes |
No |
Interest deductible on loan to |
Yes |
No |
No |
Available for use as collateral |
Yes |
No |
Yes |
Tax-deferred/tax-free transfer to spouse |
Yes |
Yes |
Yes |
Tax-deferred/tax-free transfer to |
No |
No – fully taxable |
Yes (investment income after date of death is taxable) |
Loss denied on transfer-in-kind |
Yes |
Yes |
Yes |
If you’re still not sure which plan or combination is right for you, a financial advisor can help you. Based on your individual needs and preferences, a financial advisor will work with you to determine how much of your savings should be in each of these plans, taking into account their tax implications and how you want your investment to grow.
Tax Free Saving Accounts don't have to be confusing. Find out more about their benefits and how they can help you save.
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