EXPERT ADVICE - FINANCIAL
8 ways to help lower taxes and boost retirement savings 2019 is here and so is RRSP season! R educing taxes can go a long way in helping save for retirement. Here’s how to make it happen. Submitted by Evan Patkai, B.B.A. | Sun Life Financial - Patkai & Son Financial Services Inc.
1. TFSAs For low- to mid-income earners, consider the tax-free savings account (TFSA). In lower tax brackets, the registered retirement savings plan (RRSP) deduction isn’t worth as much — it gets less bang for the buck. And at withdrawal time for a TFSA, there’s no tax slip – so if you are still lower-income earners during your retirement years, you’ll be more likely to receive increased government benefits. Also, lower-income earners, especially younger earners, often like the liquidity of the TFSA. What happens if you need to withdraw money for a vacation, car, home or for an emergency? When you take money out of a TFSA, you’re not taxed (unlike a withdrawal from an RRSP). 2. RRSPs RRSPs are a sound option, especially for higher-income earners. Ultimately, the pros and cons of a TFSA versus an RRSP contribution may depend on whether your tax bracket in retirement is lower or higher than it was when you made the initial contribution. Another consideration involves Canadians working past age 65 and even into their 70s, who could be in a higher tax bracket when withdrawing money from an RRSP (not an ideal situation).
Made with FlippingBook - Online catalogs