{"id":2558,"date":"2015-01-30T10:31:23","date_gmt":"2015-01-30T15:31:23","guid":{"rendered":"https:\/\/goday.ca\/blog\/?p=2558"},"modified":"2021-09-30T11:11:01","modified_gmt":"2021-09-30T15:11:01","slug":"rrsp-contribution-guide-for-the-2014-tax-year","status":"publish","type":"post","link":"https:\/\/goday.ca\/blog\/rrsp-contribution-guide-for-the-2014-tax-year\/","title":{"rendered":"RRSP Contribution Guide for the 2014 Tax Year"},"content":{"rendered":"

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Tax time is busy for everyone, so here is a quick getting started guide to get you on your way to saving for your future via RRSP’s & TFSA’s<\/a>. This week, we’ll cover the former, so check back next week when we review TFSA’s in detail.<\/p>\n

What’s the difference between the two forms? An RRSP’s contribution limit is based on a percentage of your total annual income and those contributions are tax-deductible, however if you withdraw on your RRSP, those are subject to income tax like any other income. The additional benefit to contributing to RRSP’s is that any growth on that investment is also non-taxable.<\/p>\n

A TFSA is a fixed amount regardless of your income (set at $5,500 a year for 2014) and those contributions are not tax deductible. Additionally, any growth on that investment, contrary to the nature of an RRSP, will be taxable. Another notable difference is that if you withdraw, you will not be taxed.<\/p>\n

Essentially, a TFSA and an RRSP are different savings tools, and a TFSA is seen as supplemental to the RRSP. The latter is meant for long term benefit and the other for short term<\/a>. A good savings portfolio would include both, but since that may not always be possible right away, consider your most pressing needs or financial goals<\/a> to determine which to contribute to first.<\/p>\n