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## Financial Situation and Goals

I am a 25-year-old individual with a maxed TFSA and FHSA and have significant savings in a High Yield Savings Account (HYSA), which will allow me to max out my TFSA and FHSA for the next three years. My investment in both accounts is in XEQT. I do not have any outstanding student loan debts or credit card debts, and I do not have any dependents.

## Current Income and Expenses

I earn $75k annually in Ontario, and my monthly expenses include $1100 for my studio, $150 for utilities, $300-350 for groceries, and $500 for entertainment spending. I do not own a car as public transportation in my area, though not great, is still available.

## Seeking Financial Advice

I am unsure about what to do with the rest of my savings. I am considering opening a self-directed account to invest more in XEQT, despite the 50% capital gains tax. I am hesitant about contributing to an RRSP due to my government job with pension plans. However, I believe I could max out my RRSP contributions quickly if I choose to do so in the coming years.

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View Reference


  • millijuna

    You wouldn’t be paying 50% in capital gains. 50% of your capital gains gets added to your income and so is taxed at your marginal tax rate. 

    Assuming your marginal tax rate is roughly 30%, you’d be paying closer to 15% on any realized gains. 

  • SadCod6667

    It is never early to contribute to the rrsp. you can make contributions but not deduct them

  • sailboatblues

    Spend your money! Enjoy your life. If your retirement is fairly secure and your short term savings goals are in good place, try enjoying the money you’re earning!

  • JMK7154

    Most likely being downvoted because people are salty that you have money from inheritance/family etc

  • PFIFreedom

    You’re 25. I’m going to have to disagree with most people here saying put it into RRSP. Chances are your earning potential and tax bracket is much higher in the future. What is your career path? Consider future earnings. Higher in tax bracket you are, better it will be to contribute to RRSP then. My husband and I both have a ton… a ton of room in RRSP. I quit work last year but husband still works. Point is. Our tax bracket was very high. We still haven’t contributed because I’m expecting a return from investment and so is he. So on those years when we expect a large payout that puts us in the top bracket, we will contribute to RRSP to avoid paying mega taxes.

    In my opinion, just keep the money in margin account. Save your RRSP room.

  • A-Wise-Cobbler

    If you have money and you don’t need it max out or at least contribute to RRSP.

    Why go non registered if RRSP still has room.

  • tvandy123

    People downvote because you’re doing better financially then most even at the age of 25. I made a post and similarly got downvoted to hell lol. Keep on moving

  • butts-kapinsky

    I’ll add this, as I don’t think it has been mentioned but is very much an important consideration when thinking about investment.

    Spend more, but spend on things which will serve you best long term. 

    Figure out some fitness goals and get a personal trainer to help you reach those goals in a healthy way and also to keep you accountable to those goals. Maybe start seeing a physio regularly if you have any lingering aches. And, if you don’t have them yet, you will soon so go to a physio then.

    Meet with a dietician and build out a diet that makes your brain and body feel good. Take some cooking classes so that you can learn how to express some creativity and novelty within the confines of that diet.

  • Peanutbunny7

    You’re good. Spend some money on life experiences

  • RedControllers

    Same boat here, I maxed out my RRSP and now do margin

  • allbutluk

    U getting downvote cause only poor struggling people has any right to post on this sub as per some redditors

  • morty_OF

    Take a 6 month leave and travel

  • Beautiful_Sector2657


  • Turtl3dov3

    Same situation and age range as you. I’m throwing in money in my RRSP every month and that’s about it.

    Do you also have an emergency fund ready? Build that up before you do your RRSP

  • Severe-Grand6870

    You gotta be an EC for the Feds in Quebec

  • feignignorence

    You’re done. You beat the game. Now just keep up contributing each year.

  • Miserable_Tadpole_92

    Max out your RRSP. Each year on your notice of assetment it’ll be written how much you can contribute, which already takes into account your employer’s plan.

    The next big tax shelter in Canada is a house (principal residence). Of you can’t afford one, the next best thing is non registered accounts. But you must first look at your risk tolerance. So don’t go around investing in a bunch of risky assets just for the tax advantaged due to potential capital gains . That’s a faux pas.

    If you are saving for a house, GICs and fixed income are probably best.

  • DudeWithASweater

    Definitely max out your RRSP unless you think there’s a real chance you will be earning significantly more in the next few years. Otherwise max that out first as it’s tax deferred.

  • Severe-Grand6870

    Where did you find a studio that cheap everything is minum 1600 in my area.

  • take-a-gamble

    XEQT is a pretty safe bet, GALT has more upside in Q4 tho

  • Numerous-Top-1939

    Buy the rrsp then use it to buy home

  • jdhrjm

    Dude it’s not difficult… max out tfsa, fhsa, then rrsp, then open up a non registered account and build that up…. And you only pay cap gains tax in a non registered account IF you SELL at a gain

  • twiggiroma

    Hey I’m in the same situation, FHSA and TFSA maxed. Now, I’m saving for a house. I keep all of my other savings in Wealthsimple Cash earning 5% interest so it’s accessible whenever I need, unlike GIC. I don’t know where else to put it and I also feel like I shouldn’t use my RRSP room yet. Hmm

  • impossible4

    Enjoy yourself, if you maxed out your registered accounts and pay your expenses and you still have money, sink some into a hobby or a trip, buy yourself some nice clothes or tools, or do things to buy yourself time, thats the resource you are actually limited to.
    Im 26 and have 2 kids, i was making between 60 and 80k in manitoba pre kids and i certainly wish id spend more time going out into the woods camping, or travelling by myself
    Now i feel lucky when i get off work a couple hours early and just chill before daycare is out.
    Everyone seems to need to sprint ahead, you’re doing well, enjoy doing well.

  • Peanut_Wide

    Having maxed out my RRSP and TFSA. I also have a non registered investment account that i put money in monthly. I don’t pay capital gains on it until i take money out ( which i haven’t yet ).

    But can’t you put money into an RRSP?

  • North_n_South_43

    Government job – is your pension plan defined benefit or defined contribution?

    If it is defined benefit, possibly with an inflation indexation, I would max that puppy for all it is worth. Your other money would be paying for bailing out the public pension plan anyway.

  • Ok-Animator2183

    I’d buy a couple oz of gold from Costco

  • danbee123

    RRSP is definitely a valid option. The tax credits, combined with tax free growth make for potentially huge returns.

  • JCMS99

    When do you plan to buy a property?
    Go with the RRSP. You can push back the deductions to the future for a better tax credit.
    You’ll be able to take back 60k from your RRSP for the HBP too.
    RRSP withdrawal will eventually be taxed, so it’s better to empty it than your TSFA when buying a property.

  • B0829

    When do you want to buy a home?

  • kymedcs

    Forget the downvotes, you’re doing great in your position thats what matters, and now you wonder what’s next. In my opinion, live a little. We’re both young. Money today has value! Travel.

  • Background_Panda_187

    Max your RRSP…..

  • SandwichDelicious

    Every 10k-15k you save and invest for retirement during your early twenties is about 1 year you can retire earlier. Thanks to Father Time and compounding interest.

  • bwwatr

    Ideas ITT I’ve liked so far: RRSP (mind the lower limits due to pension, but still better than taxable account), health and wellness spending is worth every penny, charitable donations (though I’d not go nearly as aggressive as 10% on 75K), enjoy more of your money on experiences. Don’t go too hard in one direction, life is about balance.

  • kijomac

    Assuming you’re planning to use the FHSA to get a home in a few years, you might as well also put $35K into an RRSP to use the Home Buyers Plan at the same time.

  • BluebirdLow5079

    Travel! Enjoy your money, you’re doing amazing. I don’t think you should lock it up in an RRSP, but for tax refund reasons, contributing some in there could be good.

  • Grand-Corner1030

    You already have a taxable account, your HISA. A HISA is nothing more than a self directed account with different marketing.

    The question should be, “do I continue to make 4% and get taxed at full marginal rate, or switch to stock ETF’s and cut the taxes in half? One has a guaranteed return, the other is more volatile.

    It all depends on your plans. Buying a house vs retirement vs other?

  • SilentGenX

    Buy real estate.