RRSP or TFSA for retirement investing. How about both?
BNN Bloomberg
As the February 29 registered retirement savings plan (RRSP) deadline draws near, a new survey from Edward Jones Canada finds nearly half of Canadians expect to make a contribution against their 2023 income.
Whether an RRSP is the best choice for your retirement investments from a tax perspective depends on individual circumstances. In some cases contributing to a tax free savings account (TFSA) can bring bigger savings. For investors with a longer-term view to retirement, the right combination of both can work wonders.
Canadians love to get their RRSP tax refunds in the spring but not all refunds are equal. RRSPs deliver the biggest tax advantage for wealthy Canadians because contributions can be deducted at the highest marginal tax rates.
That means someone with an annual income over $250,000, who is taxed at a combined federal/provincial marginal rate of 50 per cent, will lower their tax bill by half of their contribution.
