Something you did not say, and from my experience needs to be said loudly and repeatedly, a TFSA is NOT a savings account. The number of people that have literally opened a TFSA that is a savings account only simply staggers me. You can build huge wealth if you make some reasonable investments, say buying Invidia ten or 15 years ago rather than accepting a pittance of interest. On the other hand, if you have a corporate matching programme for an RRSP you have to maximize that first as where else can you get a guaranteed 100% return on your money in the first year?. BUT you have to remember that the whole fairy tale about depositing in high tax years and withdrawing in low tax years is just that, a fairy tale. With any sort of investment success the tax bracket at retirement will be higher than anything you paid during your employment years. So, to sum up, 1) fund all matched contributions, 2) Max contribution to TFSA Investment account, and 3) put the rest in an unregistered investment account(s). Retire wealthy.
It is a very good point about the TFSA and "savings account" and I did another video on this exact topic recently. Here is the link with a number of comparisons - ua-cam.com/video/qDYnR87jxrk/v-deo.html&t I disagree with your comment on the "fairy tale" of depositing to your RRSP in high tax years and then withdrawing in lower tax years. It's situational. If you are sitting on a large defined benefit pension in retirement then yes chances are you may withdraw the funds in at least an equal tax rate, if not higher. For anybody else though, you would either need to be contributing to your RRSP in a low tax bracket to begin with (not typically a good move) or need some serious investment returns so you are sitting on $1.5mn + RRSP once you hit retirement (not an issue for most folks).
@@beachesfinancialgroup Look back to the beginning of the RRSP in 1957 and review the tax brackets then and compare to now. Perhaps chart out the relative values. You will find the rate differentials have slipped away, which makes me stand by my advise as to how to allocate the funding for best results. Just for fun, you could do a poll and ask people how much of their income CPP is supposed to replace and also ask if they have a company pension of any kind and if so what percentage of their income was the pension supposed to replace. I think you will find the answers startling. I certainly did (very unscientific poll)
@@beachesfinancialgroup By far the largest answer was "I have no idea" ~75%, all of it ~12% and the rest random from 25 to 90%. As I said very unscientific but the "no idea" contingent is pretty scary. That implies no plan or fiscal thought either. This sort of thing is why family finances needs to be a mandatory course in high school.
100% agree on family finances being taught in school. There is a huge gap there. Results are not overly surprising, I would have expected a similar response.
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Austin Danger Powers is my favourite Scotsman...but you are a close second, laddy!
I will take that, some excellent company to be in!
Something you did not say, and from my experience needs to be said loudly and repeatedly, a TFSA is NOT a savings account. The number of people that have literally opened a TFSA that is a savings account only simply staggers me. You can build huge wealth if you make some reasonable investments, say buying Invidia ten or 15 years ago rather than accepting a pittance of interest. On the other hand, if you have a corporate matching programme for an RRSP you have to maximize that first as where else can you get a guaranteed 100% return on your money in the first year?. BUT you have to remember that the whole fairy tale about depositing in high tax years and withdrawing in low tax years is just that, a fairy tale. With any sort of investment success the tax bracket at retirement will be higher than anything you paid during your employment years. So, to sum up, 1) fund all matched contributions, 2) Max contribution to TFSA Investment account, and 3) put the rest in an unregistered investment account(s). Retire wealthy.
It is a very good point about the TFSA and "savings account" and I did another video on this exact topic recently. Here is the link with a number of comparisons - ua-cam.com/video/qDYnR87jxrk/v-deo.html&t
I disagree with your comment on the "fairy tale" of depositing to your RRSP in high tax years and then withdrawing in lower tax years. It's situational. If you are sitting on a large defined benefit pension in retirement then yes chances are you may withdraw the funds in at least an equal tax rate, if not higher. For anybody else though, you would either need to be contributing to your RRSP in a low tax bracket to begin with (not typically a good move) or need some serious investment returns so you are sitting on $1.5mn + RRSP once you hit retirement (not an issue for most folks).
@@beachesfinancialgroup Look back to the beginning of the RRSP in 1957 and review the tax brackets then and compare to now. Perhaps chart out the relative values. You will find the rate differentials have slipped away, which makes me stand by my advise as to how to allocate the funding for best results. Just for fun, you could do a poll and ask people how much of their income CPP is supposed to replace and also ask if they have a company pension of any kind and if so what percentage of their income was the pension supposed to replace. I think you will find the answers startling. I certainly did (very unscientific poll)
My guess is the majority would not know the answer to that. What did your poll find?
@@beachesfinancialgroup By far the largest answer was "I have no idea" ~75%, all of it ~12% and the rest random from 25 to 90%. As I said very unscientific but the "no idea" contingent is pretty scary. That implies no plan or fiscal thought either. This sort of thing is why family finances needs to be a mandatory course in high school.
100% agree on family finances being taught in school. There is a huge gap there. Results are not overly surprising, I would have expected a similar response.