In this latest video from Jessie, he answers the question
“What’s better for Seniors? Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA)?”
He discusses different factors that you can look into and study to find your answer.
Factor #1 “What is your current tax bracket?” This is easy to figure it out by looking in your tax return.
Factor #2 What’s your expected marginal tax bracket in retirement? Jessie explains that it is better to do RSP if you’re income is gonna be higher in your contributing years and lower in retirement. That means you get a higher tax bracket when you put it in and you pull money out in a lower tax bracket.
For TFSA’s, Jessie advised that if you’re gonna be in a higher tax bracket in retirement you might as well put money in a TFSA, grow your money tax free and pull it out in a higher tax bracket with no tax implications.
Jessie also added that it is important to keep in mind other factors that will determine what option will be the best for you. He will be willing to help you find your custom answer.
Watch the full video here:
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