RRSP vs TFSA vs FHSA

RRSP vs TFSA vs FHSA By Bruno Scanga Financial Columnist Which investment option is best for you! When it comes time to decide which mix of savings is best for you, your options can look quite confusing. There are registered retirement saving plans (RRSP’s) Tax free saving accounts (TFSA’s and First Home Buyers saving accounts (FHSA). Establishing which plan or combination of plans works best for you depends on your own personal, goals and financial situation. RRSP’s, TFSA, s FHSA’s Most Canadians hold RRSP’s where they can claim deduction and then the deferral of tax until they withdraw funds at retirement. RRSP’s have numerous other benefits and as Canadians many do not use these upon reaching retirement. Something you may wish to discuss in your preretirement years. The introduction of TFSA has provided another powerful saving tool that allows investments to grow tax free with the opportunity to withdraw funds when need. This does have some restrictions if funds are withdrawn same year of contributions. The withdrawal of TFSA can create costly penalties if funds are repaid to quick. First Homebuyers saving accounts FHSA is the newest registered plans that gives first time home buyers the opportunity to invest up to $40,000.00 in a lifetime for the purchase of a first homeowner tax free basis. This plan be open if you are over the age of 18. This plan is a great tool for grandparents that wish to help kids and grandkids with saving for a first home. Ask a qualified investment advisor how to arrange suggest a plan. Like RRSP contributions are tax deductible and withdrawals for the purchase of a new home are non taxable like a TFSA. All plans have limits and maximum contribution limits, and you should always confirm your contribution limit in you CRA my Account. Before making contributions discuss your options with a qualified investment advisor to ensure you are in vesting in plans that follow your risk tolerance. Simple planning gets you where you need to go never chase the larger returns can bring larger loses.