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MacDougalbry · 02-28-2008, 06:29 AM

If you end up being in the same tax bracket at the time you withdraw the money, then there is no difference between the two plans. If you end up being in a higher tax bracket, then you would have been better off with the new savings plan. I would say the new plan is ideal for young people who haven't reached their peak earning years yet who are trying to save money for a home or something like that, whereas the RRSP still wins for regular retirement savings.

RRSP TFSA
13600 10000 -- Reinvest tax credit 36%
15640 11500 -- 15% return each year
17986 13225
20684 15209
23786 17490
27354 20114 -- End of year 5, before tax
20114 20114 -- After tax penalty on withdrawing, 36%

02-28-2008, 06:29 AM	#52
MacDougalbry Lifetime Suspension Join Date: Mar 2006 Exp:	If you end up being in the same tax bracket at the time you withdraw the money, then there is no difference between the two plans. If you end up being in a higher tax bracket, then you would have been better off with the new savings plan. I would say the new plan is ideal for young people who haven't reached their peak earning years yet who are trying to save money for a home or something like that, whereas the RRSP still wins for regular retirement savings. RRSP TFSA 13600 10000 -- Reinvest tax credit 36% 15640 11500 -- 15% return each year 17986 13225 20684 15209 23786 17490 27354 20114 -- End of year 5, before tax 20114 20114 -- After tax penalty on withdrawing, 36% Last edited by MacDougalbry; 02-28-2008 at 06:31 AM.