TFSA vs RRSP

One of the most common questions that we get asked is “Is it better to have a TFSA or an RRSP?”  Like most questions in life, the answer depends on your situation.  This comparison from Dynamic Funds lists some of the most important differences between TFSAs and RRSPs.  Keep in mind that investments are tools and the correct tool can make a job a lot easier.  Ever try to chop an onion with a spoon, for example?  While investing for retirement is slightly more complicated than the above example, the differences between investing with a TFSA or an RRSP can have significant impact.

Another consideration is that investing for and in your retirement is not an either or situation.  It may be perfectly reasonable to have both a TFSA and an RRSP.  Money held in a TFSA can be taken out and put into an RRSP at anytime (as long as there is contribution room).  It all depends on your situation, your goals, and how you plan on making your goals reality.

Take a look at the table and decide which qualities are more important to you now and think about how they may potentially affect you when you retire and the answer will become clearer.

TFSAvsRRSP

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