TaxTips.ca
Canadian Tax and
Financial Information
  Invest in RRSPs  

TaxTips.ca does not research or endorse any product   or service appearing in ads on this site.  Before making a major financial decision you  should consult a qualified professional.
Copyright © 2010

Web www.TaxTips.ca  

Looking for US tax information?  See www.USTaxTips.net Bookmark and Share

List your firm for  free in the TaxTips.ca Business Directory.

Need an accounting, tax or financial advisor?  Look in  the TaxTips.ca Business Directory.

Home
What's New
Calculators
Financial Planning
Real Estate
Stocks Bonds etc.
RRSP RRIF TFSA
Personal Tax
Seniors
Disabilities
Business
GST/HST
PST
Canada
Alberta
British Columbia
Manitoba
Ontario
Québec
Saskatchewan
Atlantic Provinces
Territories
Federal Budget
Provincial Budgets
Statistics etc.
Glossary
Site Map
Business Directory
Advertise With Us
Calculator Licensing
Contact Us/About Us
Links

RRSPs and RRIFs
Stocks, Bonds etc.

Is it better to invest in RRSPs or in a non-registered account?

For the average Canadian taxpayer, it is usually better to invest in RRSPs, because:

bullet

you will probably be in the same or a lower tax bracket when you retire

bullet

your investment income grows tax-free inside the RRSP

bullet

you can invest in stocks, bonds, foreign and other investments without worrying about the tax implications

bullet

you are less likely to withdraw the money than if you are saving it in an unregistered account, so you will build up a sizeable nest egg by retirement

It may be better to invest in a non-registered account (outside of RRSPs) if:

bullet

you will be in a higher tax bracket after retirement, and

bullet

you invest all your money in investments which produce capital gains or eligible Canadian dividends, and

bullet

you are comfortable not owning any bonds or other interest-producing investments, and

bullet

you do not sell any investments until retirement, because the sale would generate taxable capital gains.

Tax tip:  most people should invest in RRSPs.

See also:

bullet

Recommended stocks/ETFs for inside or outside of your RRSP

bullet

What is better - TFSA or RRSP?

 

Revised: June 16, 2010

 

 

Copyright © 2010  See Reproduction of information on TaxTips.ca

The information on this site is not intended to be a substitute for professional advice.  Each person's situation differs, and a professional advisor can assist you in using the information on this web site to your best advantage.
See our Business Directory for tax, accounting and finance-related firms in your area.
Please see our legal disclaimer.