Jordan Wealth Management Group - ScotiaMcLeod Truro

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RSP / TFSA Comparison

How do an RSP and a TFSA compare?

	RRSP	TFSA
Minimum age to start contributing	No minimum. The individual must declare income.	Must wait until 18th birthday or age of majority in your province to open a TFSA. e.g. age of majority in NS is 19. Accumulation of contribution room will start at age 18 regardless of province.
Maximum amount of contribution	$20,000 or 18% of declared income. The maximum amount is increasing year after year.	$5,000 per year. In future years, this amount will be indexed to inflation and increase an additional $500 every year.
Contribution is tax deductible	Yes.	No.
Investment gains (interest, dividend and capital gains) are not taxable	Yes.	Yes.
Spousal contribution are permitted	Yes.	Yes. You will be able to contribute to a spouse's TFSA without affecting your own contribution room. Income attribution rules, which currently govern RRSPs, do not apply.
Withdrawals from the account are taxable.	Yes. They are not taxable in a case of a Home Buyer Plan and to go back to school (those 2 programs work under certain restrictions).	No. Withdrawals from the TFSA are not taxable.
Unused contribution room can be carried forward.	Yes.	Yes.
You can “reimburse” your withdrawal in the account.	No. You can only reimburse under the HBP and return to school program under certain restrictions.	Yes. You can reimburse your withdrawals from the TFSA the following year without penalties.