One of the most common investment questions Canadians ask themselves today is, “Which is better, TFSA or RRSP”?
Here’s the good news – it doesn’t have to be an either or choice. Why not do both? Below are the features of both plans to help you understand the differences.
Tax Free Savings Account (TFSA)
- Any Canadian resident age 18 or over may open a TFSA. Contribution is not based on earned income. There is no maximum age for contribution.
- Maximum contribution is $5,500 per year.
- There is carry forward room for each year in which the maximum contribution was not made. For those who have not yet contributed to a TFSA, the cumulative total contribution room as of 2017 is $52,000. Read more
Investing in today’s environment is not for the faint of heart. However, fortunately for Canadians, Segregated Fund products offered by many life insurance companies provide a safety net for nervous investors.
Fund products present some interesting opportunities for people looking to get more security in their investment portfolios without sacrificing their potential for growth.
100% Maturity and Death Benefit Guarantee
At a time when most companies are reducing their guarantees to 75%, a few companies still offer 100% guarantees for both maturity value and death benefit. Read more
On April 21, 2015, Finance Minister Joe Oliver tabled his first federal budget. The provisions of the budget will be of particular interest to owners of small and medium sized businesses, seniors and families with children. As well, those looking to make certain charitable donations will be encouraged by Oliver’s budget.
Below is a brief commentary on each of the key budget proposals.
For Seniors and Savers
Increase in Tax Free Savings Account (TFSA) Limit
- Effective January 1, 2015 the annual contribution limit has been increased from $5,500 to $10,000;
- As a consequence, the automatic indexing of the annual contribution limit has been eliminated;
- On April 24, the CRA announced that even though this provision is not law as yet, they will allow increased deposits to a TFSA effective immediately.