To be or not to be, TFSA or RRSP, these are the questions that face us all. There is sometimes confusion when i speak to people about what is the best option for their retirement savings.There was a good article written by the people of MoneySense and the quote below sums it up in simple terms.
In general, those earning a low income (under $35,000 or so) should favor the TFSA, while high-income earners are likely to be better off with an RRSP. For those earning a moderate income, however, it’s a coin flip.
The article provides a couple of key points as to when TFSAs are better
1. You expect to be in a higher tax bracket in retirement.
If you expect to earn a generous pension, the combined income from your pensions and your RRSP or RRIF withdrawals in retirement could drive you into a higher tax bracket than when you working.
2. You earn a low income.
The full post with detailed information can be read here: RRSP vs. TFSA: Which is right for you?