How do the TFSA and the RRSP stack up?
|Age limit||Starting at age 18. |
No age limit.
|No minimum age. |
No later than December 31 of the year you turn 71.
|Contribution room||$5,000 in 2009, then indexed to the consumer price index in $500 increments.||18% of income, up to a contribution limit of $21,000 for 2009. |
This limit is adjusted based on increases in the Average Industrial Wage (AIW).
|Taxable investment earnings||No||Not as long as the money remains in the RRSP.|
|Impact of withdrawals on government benefits (e.g., Employment Insurance, Old Age Security, Canada Child Tax Benefit)||None||Yes, because they are added to your taxable income.|
|Withdrawals free up contribution room (the amount withdrawn can be re-contributed at a later date)||Yes. The amounts withdrawn free up an equivalent amount of contribution room the following year.||No|
|Spousal contributions||No, but you can gift money to your spouse to be invested in their own TFSA.||Yes|
|Death taxes||No (for the value as at the date of death).||Yes, except in the event of a tax-free rollover.|
|Eligible savings products|
Term investments (excluding the Non-Redeemable Guaranteed Interest Fund)
Guaranteed Investment Funds
The information in this table has been adapted from the 2008 budget tabled by Canada's Minister of Finance.