Plan types

RRSP

A registered retirement savings plan (RRSP) is for anyone up to age 71 who is earning taxable income and wants to save for retirement.

Advantages

• Get a tax refund or tax savings.
• Pay tax on what you withdraw.
• Use a portion of your funds to pay for school (Lifelong Learning Plan – LLP), or to purchase or build a home (Home Buyers’ Plan – HBP).

TFSA

A tax-free savings account (TFSA) is for anyone 18 or over who wants to grow their savings tax-free.

Advantages

• Put away money in a tax-sheltered environment even if you've maxed out your RRSP.
• Earn tax-free interest on your investments.
• Make withdrawals without affecting your eligibility for income-tested credits or benefits (TFSA withdrawals aren’t considered income).
• Withdrawn amounts are added back to your TFSA contribution room in the following year.
• Continue to save during retirement—there’s no age limit for the TFSA.

RRSP vs. TFSA – Which is right for you?

The RRSP and TFSA are complementary plans, so choose the one that best meets your needs.

A TFSA can be a better option if you earn a modest income. When you earn more money, you’ll be able to transfer your savings to an RRSP and save more tax. Make an appointment with a representative Opens in a new window. who can help you determine the best strategy for you.

What do you want?	RRSP	TFSA
To make contributions after you turn 71.	—Non inclus
To reinvest withdrawn amounts.	—Non inclus
To contribute to your spouse’s plan/account.		—Non inclus
To deduct your contributions from your taxable income.		—Non inclus
To withdraw money tax-free.	—Non inclus
To not pay tax upon the account holder’s death.	—Non inclus
To use a portion of your savings to go back to school (Lifelong Learning Plan), or to buy or build a home (Home Buyer’s Plan).		—Non inclus
To withdraw money without affecting your income-tested credit/benefit amounts and eligibility.	—Non inclus

LIRA and Locked-in RRSP

Are you quitting a job at a company where you have a pension plan? You can transfer the accumulated amounts to one of the following accounts:

• Locked-in retirement account (LIRA)
• Locked-in RRSP

In certain exceptional circumstances, you can make pre-retirement withdrawals from the locked-in accounts. Additional contributions cannot be made. The account type and the provisions that apply to you depend on which jurisdiction (provincial or federal) your employer’s plan was established under.

Advantages

• Keep managing the investments from your former employer’s pension plan.
• Grow your investments tax-free.
• Save specifically for retirement.

RRIF

A registered retirement income fund (RRIF) is an extension of your RRSP. With a RRIF, you can convert your RRSP into retirement income. Each year, you’ll need to withdraw the minimum amount required by law.

Advantages

• Keep managing your investments during retirement.
• Increase the amount and frequency of your withdrawals.
• Grow your investments tax-free.

If you don’t want to convert your RRSP into a RRIF, you can:

• Use the funds to purchase an annuity.
• Cash out your RRSP savings (you’ll be fully taxed on this withdrawal).

LIF and LRIF

You’ll need to convert your LIRA or Locked-in RRSP into a Life income fund (LIF) or Locked-in retirement income fund (LRIF) by December 31 of the year you turn 71. The LRIF is only available in some provinces.

Advantages

• Obtain guaranteed income
• Grow your investments tax-free during your retirement.
• Keep managing the investments from your former employer’s pension plan.

• Guaranteed Investment Funds
• Term investments (the Non-Redeemable Term Investment is only eligible for RRSPs, LIRAs and Locked-in RRSPs)
• Market-Linked Term Investments (LIF-eligible in Quebec only)