Solutions
Which account, in what order, and why
Canada has a useful set of registered accounts. The value comes from using the right one for each goal — and knowing when a non-registered account is the better answer.
The main account types
TFSA
Contributions are after-tax; growth and withdrawals are tax-free. Flexible for medium-term goals and retirement.
RRSP
Contributions may reduce taxable income now; withdrawals are taxable later. Converts to a RRIF by the end of the year you turn 71.
FHSA
Designed for a first home, combining a deduction on contribution with a tax-free qualifying withdrawal.
RESP
Education savings with access to government grants.
Learn moreNon-registered
No contribution limits, but investment income is taxable annually. Useful once registered room is used.
Segregated funds
Insurance contracts with certain guarantees and potential estate benefits, with associated fees to weigh.
How the order gets decided
The sequence depends on your marginal tax rate now versus in retirement, your timeline, whether an employer matches contributions, and whether the money may be needed before the goal date.
For many households a matched workplace plan comes first, followed by high-interest debt, then a mix of TFSA and RRSP based on the tax comparison, with non-registered savings after that. Your situation may reasonably differ.
Your advisor will show the comparison using your own numbers rather than a general rule of thumb.
Get the sequence right
A short review can meaningfully change the long-term result.
Contribution limits, grant amounts and tax rules are set by government and change over time. Investco Financial is not a securities dealer, exempt market dealer or mutual fund dealer; product availability depends on advisor licensing. Segregated funds are insurance contracts issued by licensed carriers; guarantees apply to specific terms and conditions set out in the contract.