RRSP or TFSA? Go For TFSA When You Can’t Decide

February 18th, 2017 Posted in Investing|Personal Finance

TFSA: You Can’t Go Wrong

This time of the year, when the RRSP deadline is fast approaching, it’s hard not to notice an article about TFSA or RRSP in Canadian newspapers or magazines. However, if you get confused after reading so many of these articles and can’t decide, going for a TFSA is not a bad option at all.

In the past, I wrote about TFSA. As far as I can remember, that was the only time I wrote about TFSA, as after seeing so many articles about TFSA and RRSP again and again and writing about the same stuff I decided not do discuss it anymore. And that is a good change for someone who is trying to sort out TFSA and RRSP will only be more confused after bombarded with too much information.

If you are confused about these two and still not sure, the best thing to do is park your money in a TFSA, rather than in an RRSP. The reason is very simple: TFSA lets you able to take out your money any time without paying back withholding taxes, unlike an RRSP. One thing you need to keep in mind is that the money you are taking out from your TFSA will create equal contribution room next year, not in the same year.

And what should you do if you want to get some clear grasp of TFSA? Talk to a qualified financial professional face to face. And yes, don’t forget to write down all your questions and concerns before meeting.

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