18 Responses

  1. TFSA is like 401K and RRSP is like Roth IRA. TFSA limit is 57,500? That’s crazy man! We can contribute 18,000 max to 401 (K). Even maxing that out is a struggle. Roth IRA is 5,500.

    Based on what you mentioned it makes sense to add US equity in TFSA and Canadian equity in RRSP. How does it work out for ETFs? Holding US ETFs in TFSA gives you US tax exemption?

    I looks like I lose 30% of my dividends from international funds. The only way to get a foreign tax credit is by itemizing. With my mortgage payment I might itemize this year.
    dividendgeek recently posted…Commission-Free ETFs (TD Ameritrade/Scottrade)My Profile

  2. May says:

    No debate, just max out them all, rrsp, tfsa, resp. 🙂

  3. The beautiful thing about this infamous question is that whoever is asking it is already winning 🙂
    Dividend Investor! recently posted…The 2017 Report, Rounding Up 5 Years as an Investor.My Profile

  4. MG says:

    Hi Passive,
    Generally agree with your comments and conclusions. Wanted to point out that witholding tax in TFSA is only on dividends and not gains.

    • Hey mg welcome, love seeing new faces. You just blew my mind! I seriously didnt know that. Googled it to make sure and you are 100% right. Always learning something new. Thanks alot will edit page and correct it.
      Thanks again

  5. Cris says:

    Happy New Year!
    Just a few points to the debate regarding TFSA and RRSP.
    -for avoiding any confusion or risk to get your USA dividends taxed keep any investment in USA market in an RRSP account
    -keep any canadian stock which pays interest or dividend +interest (Ex:H&R reit) in a registered account(TFSA or RRSP)
    -there are many calculators to help you calculate the difference/advantage of investing in TFSA vs RRSP.
    -If you are under 75000 income or under 40 years old I would consider first TFSA and only after that the RRSP
    -all the return from the RRSP contribution invest it back into TFSA or RRSP
    -sometimes I do a transfer in kind from my TFSA to RRSP account and the return I put it back to TFSA. Any withdraw from the TFSA will become available to contribute next year. Best to do this transfer is in December (you can re-contribute in January the amount in TFSA) then in February (you get the RRSP return in couple months).
    -keep the RRSP amount invested equally between spouses. It will make sense at the retirement (unless there are other considerations to take in consideration).
    -Open a spouse RRSP to help in deducting the contribution to the person with a higher income.
    -If you do not have too much money to invest then the best is to borrow money and start investing in a non-registered investing account (buy only canadian stocks which pay eligible dividends). The interest on the borrowed money is tax deductible.

    Good luck in the new year.

  6. MrSLM says:

    I actually hold mostly reit’s and things in my tfsa, anything that gives off a lot of non-eligible dividends. Do same as you for RRSP, holds all the US/international stuff. And then keep Canadian stock in my non-sheltered accounts, since once I retire those will be incredibly tax friendly.
    MrSLM recently posted…Financial Update – December 2017My Profile

  7. Leo T. Ly says:

    For me, there is no debate at all. Every year, my goals are to maximize my TFSA and RRSP contributions for both my wife and I. In addition, I have two kids and I also want to maximize the education grants for them too.

    There shouldn’t be a debate at all in my opinion. The goal is to maximize the growth of your money, minimize the tax that pay and get the most free money for your savings.
    Leo T. Ly recently posted…My Personal Net Worth Review – 2017 Year-endMy Profile

  8. I’m in my 30’s and I am focusing on my TFSA first before RRSP. Enjoyed reading this article thanks for sharing.

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