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Originally Posted by shermanator
Wanted to run my own thoughts on why I prefer an RRSP over a TFSA by folks here. My thoughts are that because RRSP is a before tax deduction, I am able to save substantially more each paycheque then I would if I were saving it after tax via a TFSA.
To use my own example, I put around $300 towards my RRSP each pay period. Were I to put 0% towards my RRSP, and rather invest into a TFSA after tax, I'd be putting around $200 each pay period to see the same net amount in my bank account.
Say I start today and save for 30 years at a compound interest rate of 5%, in my scenario I earn ~$100k more in interest by the end of the lifecycle.
Of course, the other reason is that my company is matching the first 4% of my paycheque that I put towards RRSP. So it's essentially getting 4% a year extra in a savings account that I don't ever see. But that's outside of the argument I'm making....
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Quote:
Originally Posted by V
As was shown a couple pages back, the tax you pay at the end evens out the difference.
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The taxes do even out, but frankly if you get a full match from your company you'd be crazy not to do that. Basically you put in $X and get 100% return automatically. Yeah, the taxes are going to make you wish that you had some non-registered savings one day, but I would take advantage of the matching for sure.