Is it better to put money in TFSA or RRSP? | Mike Butean

Updated: Feb 23

In this article, I will talk about if it is better to put the money in TFSA or RRSP?

When is it better to put money in RRSP?

  • first time home buyers. You can use up to $35,000 per person, which means $70,000 for a couple and you can take advantage of the tax deferral, pay it back interest free in 15 years. In 2020 a new rule for those who get divorced to be considered FTHB after 90 days living separately. Some conditions might apply.

  • if you get a matching RRSP from the employer because it is free money.

  • for the high earner, over $100,000 per year is worth looking into it especially if we expect to have less in retirement. Make sure you take advantage of the income splitting option through spousal RRSP, but be careful with the attribution rules.

When is it better to put money in TFSA?

  • for sure for incomes under $100,000/year

  • when you need flexibility for emergencies

Is it better to put money in TFSA or RRSP?

The general answers is depends on your own situation and your goals, which means also how much money you have available and taking in consideration that the $6000 contribution limit for TFSA is relatively a small amount.

Feel free to contact me if you need help with your RRSP or TFSA at: