What is the better long-term tactic for your client, TFSA or RRSP? Well, unfortunately, like all things in life, it’s not quite that simple.
Chris Nicola of CI Direct Investing took the time to dive into the subject. In fact, he even built a tool on their website to compare just that. To put it plainly, it all depends on your income now versus your income at retirement. Generally speaking, your RRSP will generate a better result as you can also invest your tax return from your RRSP contribution. Once compounded until retirement, the combination more than compensates for the tax applied at retirement.
The exception is times when your client expects to be taking a much larger income at retirement than they are currently making.
Check CI Direct Investing’s tool and you can assess the best choice for your clients.