Common Questions to Retirement Planning

One of the most common questions I get asked as an advisor in regards to retirement planning is “should I contribute to a TFSA or an RRSP”?

The answer almost always is “it depends”

I would like to be able to give you a concrete answer but the reality is no two situations are identical and a variety of factors come in to play in making the decision.

The first thing we need to do to determine which the better option for you is to understand the differences.

With RRSP contributions, you get to deduct that amount from your taxable income. The investments inside your RRSP grow tax free while they stay in the plan. Eventually when you withdrawal from your RRSP’s it will be taxable.

With TFSA Contributions, you contribute after-tax dollars. You don’t get a deduction for your contribution. But once the money is in the plan, it grows tax free, and also comes out tax free.

Once we understand the differences we need to look at the factors, some of which include:

-Will I need to use this money before retirement?

-Will I make more, less, or equal money in retirement?

– Will I be eligible for OAS or Supplement benefits in retirement?

– How will I use the tax refund that the RRSP generates?

There are plenty of things to consider, the good news is together we can help steer you on the right path.

One thing is for sure that at least one maybe both these products should be a part of your retirement plan and there is no better time than now to review it.

For more information about your wealth management, call Devron at 204.937.6557 or email devron.jakeman@catalystcu.com

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