By Mark Bull, MFA-P, CLU, CFP, CHS, CEA
President, Bull Financial
It’s tax planning time, which may not sound like an exciting time of year – but fact is, it is a crucial period in which we do everything we can to help build and protect your wealth.
At the end of this story, there are links to some fantastic one-pagers that summarize key information about three powerful tools in the tax reduction arsenal: RRSPs, TFSAs and FHSAs.
Here is a quick overview of key facts:
RRSPs (Registered Retirement Savings Plan)
For RRSPs, the 2023 contribution limit is $30,780, and this does not include the contribution room you may have carried forward from previous years. You can set up and contribute to an RRSP until the end of the year in which you turn 71. RRSP contributions are tax-deductible, but withdrawals are taxed as income.
TFSAs (Tax Free Savings Account)
For TFSAs, the 2024 contribution limit is $7,000. TFSA contributions are not tax-deductible, but, the growth within your TFSA is tax-free.
We often receive this question: “Which is better for me – the RRSP or TFSA?” Our answer: “It depends, so please contact us to discuss your unique situation.”
FHSA (First Home Savings Account)
Announced in the 2022 federal budget, an FHSA is a tax-free savings account that combines the tax advantages of the RRSP and the TFSA, and is designed to help future homeowners save for the purchase of a qualifying first home in Canada. You can contribute up to $8,000 each year, and all contributions are tax-deductible.
Want to discuss any of these tools or any other tax planning matters? Just let us know. We’re here to explain things simply, go above and beyond, and help you be Strong at every stage.™
Download the PDFs below for one page summaries:
This is a general guide only and is not intended to replace professional financial and tax advice in any form. Please consult a professional financial advisor on how it relates to your situation. The information provided here is accurate as of the date of publication.