Registered savings
TFSA
A flexible account for savings without tax on eligible withdrawals.
Use
Flexibility for projects and unexpected needs
A TFSA is often used to build a reserve, fund a medium-term project or complement retirement income.
Contributions do not create a tax deduction, but income earned in the account and eligible withdrawals are generally not taxable.
When it can fit
- You want access to your money without triggering tax on an eligible withdrawal.
- You are saving for a project before retirement.
- Your current tax rate is moderate.
- You want to complement an RRSP or diversify future income sources.
Compare
TFSA or RRSP?
The TFSA focuses on flexibility and tax-free eligible withdrawals. The RRSP focuses on a deduction today and tax deferral until withdrawal.
The right choice mainly depends on current income, expected retirement income and when you expect to use the money.
Contribution room and tax rules should be checked against your personal situation before contributing or withdrawing.
Want to place the TFSA in your plan?
A meeting helps confirm whether it should serve the short term, a specific project or retirement.