- May 4, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Financial Planning Dilemma: TFSA vs RRSP
I currently have the majority of my savings in a Tax-Free Savings Account (TFSA), with not much saved in my Registered Retirement Savings Plan (RRSP). I recently started a new job that offers a defined benefit pension plan and I anticipate earning around $160,000 this year, thanks to a bonus from my previous job. Looking ahead, I expect my income to be around $145,000 next year, with the potential to increase to over $200,000 as I progress in my career over the next 25+ years before retirement.
## Strategic Decision: RRSP Contribution Timing
Given my current financial situation and future income projections, I am puzzled about whether it would be more advantageous for me to utilize my RRSP contribution room now or defer it to later years when my income is likely to be higher. I have over $100,000 in available contribution room and I am apprehensive about withdrawing funds from my RRSP at a higher tax bracket in the future.
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No reason to save RRS contribution/tax deduction for future years. Use the search box near top of the page to see all the threads on delaying RRSP contributions.
You should be maxing your TFSA each year due to having a pension.
And you have to plan for drawdown before you hit retirement to minimize taxes.
Maybe this can help you.
[TFSA vs RRSP? Picking The Right One Could Save You $100,000+ In Tax | PlanEasy](https://www.planeasy.ca/tfsa-vs-rrsp-pick-the-right-one-and-save-100000/)
You can always move money from TFSA to RRSP later when you know the exact brackets. Remember the brackets usually increase regularly as does the personal exemption, age exemption etc..
You also should consider the impact a partner will have on finances in the future. You can income split/share pension, cpp and with planning RRSP before age 65.
TFSA, some RRSP including spousal if applicable, non reg.