Tuesday, January 26, 2010


A common question confronting me is TFSA v. RRSP. I think this is a complex question and would require knowledge of your personal situation. Everyone has different goals and dreams
they hope to accomplish, so this is usually a philosophical debate.

Personally, I am only investing in my TFSA, not my RRSP. The tax deduction would be great, but I think the benefit of lower tax is not offset by the lack of control you have over your money.

I invest for cash flow and an RRSP is not a cash flow investment, so it does not fit with my investment objectives, but again, not everyone's objectives are the same. I think it is necessary to sit down and reason through why you are investing in an RRSP and if it helps you reach your goals.

Features And Benefits Of A TFSA

• $5,000 in annual contribution room (indexed annually after 2009)
• Tax-free growth on investments
• Funds can be withdrawn at any time, for any reason
• Withdrawals are not taxable
• Amounts withdrawn can be re-contributed in future years
• Unused contribution room can be carried forward indefinitely

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