TFSA vs RRSP
When to invest in a TFSA as opposed to a RRSP
You may already use an RRSP to invest for the future. But did you know there’s another option – the Tax-Free Savings Account, or TFSA. It’s a great complement to your RRSP but the challenge is deciding when it’s best to choose a TFSA over an RRSP. Here are some general guidelines.
Want easy and frequent access to your money, use a TFSA. You’ll be able to withdraw funds tax-free at any time and re-contribute the same amount in the future. Keep your RRSP for long-term retirement savings.
If you earn a low income you may benefit more from the tax-free growth and withdrawal flexibility of a TFSA than from the modest tax deduction of an RRSP.