TFSA vs RRSP vs FHSA: Which to invest in or max out first?

Рет қаралды 38,133

2 ай бұрын

⌲Join Wealthsimple and get a $25 sign up bonus when you sign up with my referral code: ZCZSZQ www.wealthsimple.com/invite
TFSA vs RRSP vs FHSA: What’s the difference and which to invest in or max out first? I found this comprehensive chart on Wealthsimple’s IG account and found it very helpful in navigating the complexities of investment accounts in Canada. Let’s find out about the differences between TFSA, RRSP, and FHSA, and learn which one suits your financial goals best, and which to prioritize depending on your situation. #tfsa #rrsp #livingincanada
**DISCLAIMER: I am not a financial advisor, consultant, or real estate agent. This video is for entertainment purposes only and should not be considered as financial advice**
// Support my channel
Hey, if you’ve enjoyed my content, you can
- Contribute a ’SUPER THANKS’ to this video
- Buy me a coffee here: buymeacoffee.com/livingincanada
// My Book!
Amazon CA: a.co/d/ge71w4n
Amazon US: a.co/d/gL9ywUf
// ABOUT Getting ahead financially in Canada while enjoying life!
// Music: bensound.com
License code: WCD7BBSQ36PBFGDQ
// AFFILIATE LINKS
DISCLAIMER: Links included in this description may be affiliate links. If you click on one of them and make an eligible purchase, I may receive a small commission at no additional cost to you.
Public Mobile: Use my referral link to join Public Mobile and receive a one-time $10 credit! publicmobile.ca/en/undefined/...
Join Wealthsimple and get a $25 sign-up bonus when you sign up with my referral code: ZCZSZQ www.wealthsimple.com/invite
Bedframe: amzn.to/3PMyFSC
Office
Foldable desk: amzn.to/44elIW2
Bamboo monitor riser: amzn.to/43fPBUo
Foldable laptop stand: amzn.to/438UMFK
Gaming chair cover: amzn.to/3pDUdGi
Chair wheels: amzn.to/3PJT8as
5lb dumbbells: amzn.to/44jget1
Kindle Paperwhite: amzn.to/46QbHjF
Kitchen
Kichly Stainless Steel French Press: amzn.to/3uBlwmA
Brita water Filter: amzn.to/43eeUGz
Bodum water kettle: amzn.to/44gZmDo
Bodum French coffee press: amzn.to/3JNwH0f
Coffee grinder: amzn.to/3rk4Oqs
Mini blender: amzn.to/3NySc6c
Coffee ethical bean 2lb: amzn.to/3O4ft16
Entryway
Coat rack: amzn.to/3JOmoZX
Bathroom
High-pressure rain shower head: amzn.to/3JLLatR
Carbons shower head filter: amzn.to/3JMqkuf
Over-the-toilet cabinet: amzn.to/46AsruV
Shower drain hair catcher: amzn.to/3D2NGI9
** DISCLAIMER **
I am not a lawyer, not an immigration agent, and not a financial advisor or tax consultant. I'm just sharing my experience and knowledge in the hopes it can be useful to you. Please always do your own due diligence and research before deciding to purchase or sign up for any financial product or service!

Пікірлер: 93

@LivinginCanada 2 ай бұрын

Btw here's the link to the chart! instagram.com/p/CzWddtlusYP/?img_index=1 ➡Join Wealthsimple and get a $25 sign-up bonus when you sign up with my referral code: ZCZSZQ www.wealthsimple.com/invite

@imkriswithak1135 2 ай бұрын

Don’t forget. To buy that grand piano, in your example. Rrsp vs tfsa. If you withdraw from rrsp you will pay tax AND you lose that contribution room. With tfsa you can withdraw and then the next year you get that contribution room back. Making the tfsa the better choice in that sense. For me I’d do the fhsa, tfsa, then rrsp.

@LivinginCanada 2 ай бұрын

Thanks for adding that!

@user-mv9fy2jj8y 2 ай бұрын

I advised my niece to invest in this order: FHSA> TFSA> RRSP. Load up on FHSA ($8k per yr) to get both tax shelter and income deduction refund. TFSA is next with forever tax shelter investments earnings. Im my personal experience, large RRSP contributions through the yrs has been a big mistake. Now me and my wife are stuck with a large withdrawl each yr that bumps up our tax brackets and losing our OAS amounts as well as our over 65 yr tax deduction (around $1200per each yr). We are using pension income splitting to ease the pain. But it's still a major pain to have a large RRSP. When we die, more than 50% will end up in the government's hand.

@LivinginCanada 2 ай бұрын

Thanks for sharing that! Something to think about!

@benhaze1010 2 ай бұрын

It is frustrating but look at it from the angle that it is much better to be in a position where you loose the $1200/year vs. needing it. Did you think about pulling more from your RRSP before 71 and delay OAS and CPP benefits until 71?

@user-mv9fy2jj8y 2 ай бұрын

@@benhaze1010 We are prematurely converting some of our RRSPs into RRIF and withdrawing a portion each yr, taking advantage of the $2k deduction pension income. It helps a bit, but the bulk of the RRSP is still there. One thing we have been doing is to distribute some of our money to the younger family members to pay off their mortgages and other debts. In return we receive 2-3% repayment each yr from them. This way it lowers their monthly payments by as muich as 75% and lowers our tax burdens.

@kspec2001 Ай бұрын

what a great video. thank you for covering Canadian financing. there is so many financial videos out there but the majority cover how it works in the USA.

@markrosin8257 2 ай бұрын

I love how logical and easy your explanations are to follow. Thank you.

@LivinginCanada 2 ай бұрын

Thanks for confirming that, I was hoping to make things clearer!

@user-dt3jl7fl8w 2 ай бұрын

Glad I found the page , very informative.

@LivinginCanada 2 ай бұрын

Happy to hear that!

@tamiresreimer7565 Ай бұрын

Thank you for sharing your knowledge!

@zggcdht8596 Ай бұрын

What a great video. The flow chart is easy to understand. Steps are clearly explained. Thank you for your effort👍

@mmors Ай бұрын

Great helpful video thanks very much, ive always wondered which order operation would best suit my situation this gave me some good insight.

@seboteur Ай бұрын

I am a trainee financial advisor and this video is helpful!

@littlelazywallflower Ай бұрын

yas queen great video! thank you

@JayB-JayB 2 ай бұрын

So charming... and so intelligent 😊😊 Thanks for the extensive and important information!

@LivinginCanada 2 ай бұрын

Glad if it’s useful, thank you!

@vancouverdiaries738 2 ай бұрын

Great video!

@LivinginCanada 2 ай бұрын

Thanks!

@brianlau7827 Ай бұрын

This video absolutely made my decision making a lot more straight forward in terms of where I want to contribute in my current financial situation. RRSP is certainly last priority account to contribute as it wouldn't make a difference to where I land in the tax bracket, so I'm gonna just let the yearly contribution limits accumulate over time and then probably use it if I want to get down to a lower tax bracket one year.

@Northern_Squirrel 2 ай бұрын

When I started working full time, the decision was easy, it’s all about RRSP to save on taxes. No TFSA or FHSA was available. I do have TFSA since 2009. Great video and the decision tree is amazing for those need help in deciding where to put money first.

@LivinginCanada 2 ай бұрын

The more choices the more confusing it can sometimes get, so yes I also found the chart quite useful. Thank you!

@user-vd7kt2gt1v Ай бұрын

I need to come back and learn. Meanwhile, thank you!!!

@ManpreetSingh-jd6pw Ай бұрын

Insightful

@nancytan780 Ай бұрын

You are AMAZING 🤩

@IvansBikesBmws 2 ай бұрын

Good video. Thnx

@LivinginCanada 2 ай бұрын

Thanks!

@IvansBikesBmws 2 ай бұрын

@@LivinginCanada Are you happy that you picked Canada over Germany.

@kanikamaheshwari9732 Ай бұрын

I just LOVE WOMEN TALKING FINANCE & that too in such depth🥰💗

@alecc4137 Ай бұрын

My biggest fear as a 23 y/o who wants to retire as close to 55 years old (60 max), and live in my own house by 35, is that if I max out my fhsa and buy a house and take on a mortgage and all other costs of home ownership, then I wont be able to contribute enough to tfsa fast enough to benefit from compound interest significantly enough to create a nest egg big enough to retire on.

@Metoobie 3 күн бұрын

There is a real lack of practical financial education in schools. I have friends that max out their RRSP every year because their parents told them it's what to do, but in the meantime, they're carrying 10k on their credit card, quickly spiralling out of control.

@mariapawlicka2487 2 ай бұрын

Can you also do the video advising how to convert CAN$ in another country without transaction fees? All your videos are informative! 😊

@LivinginCanada 2 ай бұрын

Thank you! Do you mean transferring C$ to another country, to their currency?

@PeeGeeThirteen Ай бұрын

excellent advice, Young people too often ignore the HR emails about enrolling into the Employer Matching Group RRSP. Enroll!!!

@LivinginCanada Ай бұрын

Yup! I guess at first it sounds intimidating and complicated, but it's really free money left on the table if not used!

@dammar117 Ай бұрын

Employer contributions to RRSP are a taxable benefit. Meaning that they increase your income. If your employer isn't deducting income tax on that extra income in your paycheck, you end up losing the advantage, because your RRSP deduction will only serve to offset that income tax you didn't pay in advance. I found out the hard way, so I cancelled matching contributions. Make sure your employer is deducting tax on your paycheck. E.g. If your salary is 100k and your employer contribution is 5k, payroll should be deducting income tax on 105k. Mine wasn't, only on 100k.

@dammar117 Ай бұрын

Employer contribution to RRSP is not free money. I found out the hard way. It's a taxable benefit, meaning that you pay tax on it. Problem for me was that my employer wasn't deducting income tax on this increase to my income (which is what a taxable benefit is). In other words, say I earned 100k (i wish), payroll was deducting tax on 100k. But if my employer was contributing 5k, then my income was really 105k. But tax was deducted only on 100k. Sure, you can claim the RRSP deduction, but there's no advantage if that means you're offsetting a tax liability you haven't even paid yet. So, basically, since it was like earning 105k and having tax deducted on 100k only, I saw no advantage in receiving employer contributions. Better off contributing myself that extra 5k, which means bringing my taxable income to 90k after paying tax on 100k (vs bringing it down to 95k after paying tax on 100k).

@filipelenfers Ай бұрын

Hello! Do you have any recommendations on where the emergency fund should go? Savings account?

@ramintahouri270 2 ай бұрын

This doesn’t seem like the best strategy. I would do TFSA first then role it to either RRSP or FHSA close to the end of the year, depending on the goal. The reason is you are leaving tax free potential growth from interest that can be transferred to reduce income earned into either the two accounts.

@nadancho4057 2 ай бұрын

Thank you for the information. What happens to the FHSA account that my spouse opened before getting married? Can she still contribute and use it for future home purchase? Now we live together in a home that i own myself.

@greuser 2 ай бұрын

how about term life insurance?

@mrkcdrm 2 ай бұрын

so, if i wanted to retire early for example i'm 18 yrs old right now, which one should i max first? not looking to get a house because as a young adult, i wanted to explore the world more, so i'll be travelling.

@gujaraticanadian Ай бұрын

Even if your mortage rate is lower, remeber that unlike the creditcard debt the mortgage amount will be significantly higher. So paying that off first should be the priority

@trumpolino1284 Ай бұрын

What would you recommend to put into an TFSA?

@YG-qe2po Ай бұрын

Thanks for your informative video, i have a question about FHSA, my husband has a job and he put 8k on FHSA, does make sense if i open it too when i have no income? We have a plan to buy a first home next year, thanks in advance.❤

@sourabh988 2 ай бұрын

Please share the link to the flow chart

@LivinginCanada 2 ай бұрын

I just posted it as pinned comment!

@ManpreetSingh-jd6pw Ай бұрын

Is it any age limit to do contribution in RRSP?

@user-vo5dt8or5m 8 күн бұрын

I cant seem to find this anywhere but could you clarify about the earning threshold? Is the annual income of 50k gross or net?

@HeartlessBasterd 3 күн бұрын

That's a recommended one. Like the idea is if you gave

@thebarnburnerpodcast3056 20 күн бұрын

So the FHSA is tax deductible but TFSA is not?

@nurseuniceRN 2 ай бұрын

Too many words 🤯 Want to start investing too, but I don't know how. I want to maximize the part where I won't be charged as much tax from my salary will be working as a registered nurse. Is it safe to open TFSA first? I already had an account but didn't put anything yet. I have a GIC and high interest savings account to begin with.😊

@LivinginCanada 2 ай бұрын

Putting money in an RRSP will defer your taxes to later when you withdraw it, meaning pay less taxes now, and the taxes you pay when you withdraw the money in the future will depend on your tax bracket at that time among others. When you put money into you TFSA, that money is after-tax money, the money has already been taxes according to your current tax bracket, but the money in that account can grow tax free.

@User12345fan 2 ай бұрын

Is RRSP like a 401k? TFSA is an IRA, and where is the Roth version of these? I mean the one after tax.

@HeartlessBasterd 3 күн бұрын

Roth IRA's equivalent version is TFSA. Infact, TFSA is much better as you can withdraw anytime you want and you gain the contribution room back next year. RRSP is combination of 401k + Traditional IRA. RRSP limit is 18% of income or ~$30k (changes by year, $31560 for 2024). So, if company matches your 5%, 10% goes to Group RRSP or DCPP. So, remaining 8% you can contribute to your own RRSP, like a traditional IRA. RRSP and DCPP are similar but in DCPP you can't withdraw till you retire. In RRSP you can withdraw to buy house or for learning but have to pay back. P.S.Did my best to explain. Do your own research

@he770z1 Ай бұрын

Lets say my TFSA was 500k and i withdraw all of it. What is my contribition limit the following year? Is it 500k + the current year contribution room?

@akhilsharma20 Ай бұрын

Yep

@billcarruth8122 Ай бұрын

I would never put money into an RRSP. My employer offers the match up to 6k, but the money is managed by Sun Life. After you account for their management fees over the years there's really nothing left of that "free" money by retirement time, and their management has most likely been underperforming the S&P 500 the whole time.

@JDior94 Ай бұрын

Manulife is better for group plans

@babelfishdude Ай бұрын

RSP is interesting in that it is a forced conversion to RIF at end of year at age 71. Either that or you can take a lump sum tax hit, or a combination of both. It often comes as a surprise to many that they might want to take the lump sum tax hit or early conversion to RIF at age 59 depending on circumstance. Regardless, TFSA does not have age restrictions on sell except for extreme one-off cases. I don't like the idea of deleting pertinent information BTW. Reported to YT.

@TheParadigmShiftTV Ай бұрын

When I get paid from my employer, I get what's left over AFTER tax. If I put some of that into an RRSP, why do I get taxed again when I want to use that already taxed money when I retire? We're getting scammed.

@LivinginCanada Ай бұрын

Your salary from your employer is usually already taxed. When you put that into an RRSP, and claim your contributions, that will deduct the amount from your taxable income-making it lower, which usually results in a tax refund (so you get back the taxes you paid). If later you withdraw it, then you’ll have to pay taxes. That’s why it’s called deferred taxes. So in effect you’re only getting taxed once, but later upon withdrawal instead of now when you earn the money.

@dancrowley-2023 2 ай бұрын

What if you want to buy a home outside of Canada and you don't own a property in Canada.

@famicomnintendo 2 ай бұрын

good question

@LivinginCanada 2 ай бұрын

If you mean the HBP (Home Buyer’s plan), then the definition for First time home buyer, according to canada.ca is: “You will be considered to be a first-time home buyer if you did not, at any time in the current calendar year before the withdrawal (except the 30 days immediately before the withdrawal) or at any time in the preceding four calendar years, live in a qualifying home (or what would be a qualifying home if located in Canada) as your principal place of residence that either you owned or jointly-owned, or your current spouse or common-law partner (at the time of the withdrawal) owned or jointly-owned. “, the key here is ‘(or what would be a qualifying home if located in Canada)’, hope that clarifies!

@dancrowley-2023 2 ай бұрын

@@LivinginCanada thanks for the reply and great content. Here is the scenario reworded: What if you are a resident/citizen of Canada, do not own property in Canada but you want to get on the property ladder by buying property that is located outside of Canada. What is the best registered account to use here ? They will not allow you to use HBP funds to buy a property outside Canada ?

@benhaze1010 2 ай бұрын

@@dancrowley-2023The government will never sponsor you buying a home outside Canada with Canadian benefits (and it should't either). Also you will easily pass the foreign $100k asset which may have other taxation consequences for you.

@dancrowley-2023 2 ай бұрын

@@benhaze1010 not entirely true. You could use a TFSA actually to offset the cost of funding a property outside of Canada. You will only be subject to income tax on that asset if you rent it out and possibly an exit tax if you leave.

@krunalparekh435 2 ай бұрын

Dear Mam, Sorry to ask you a different question than the topic of video. I am krunal from India, me and my wife received Canada COPR in sep 2023. Then in oct 2023 we blessed with a baby boy. So I have made his passport and birth certificate to raise a webform in dec 2023. Since then I am raising the webforms once a month. IRCC replied that they add baby name in file and send the file to the responsible office. Till date I have not received any mail asking the generic form, family form etc. Now my COPR is going to expire on 14 april 2024. What should I do? Should I wait to add my baby in PR app.? Or I should fly alone before COPR expired?

@krunalparekh435 2 ай бұрын

Please reply anyone as it is important for me.

@franconeza3764 Ай бұрын

Plz dont leave your baby!!! I assume there should be an agency where you can ask regarding your concerns like Embassy etc Search and pray God will answer you in the right time and do not worry! Everything will work out perfectely. And plz, your baby needs you more than anyone in this world! God bless You!

@krunalparekh435 Ай бұрын

@@franconeza3764I have called the high commission office but they said webform is the only way, they cant reply like on phone. Perhaps, Glad that you reply. I understand your view. I also believe the same.

@babelfishdude Ай бұрын

TFSA because you can put stocks into it. Imagine acquiring Nvidia since TFSA inception, of which you were smart enough to "in kind" it to the TFSA. Absolute and utter win.

@bhaalgorn Ай бұрын

You can put stocks in fhsas and rrsps too, you silly Billy. How did you not know that lmfao

@akhilsharma20 Ай бұрын

Just right now go and put money in btcx.b through tfsa, put in btc

@babelfishdude Ай бұрын

@@bhaalgorn Yes, but you can't cash out easily. Although they did catch one guy "Fareed Ahamed" for investing $15,000 in three years of TFSA stockdaytrading when he made $617,371.24 I can imagine if he made $150,000 or less on $15,000 over three years - they might have let it slide. 18 year old with some hustle money? RRSP is too far off to even think about. 50 years from now the AI will probably replace human effort and productivity anyhow. $10 chocolate bar by end year? Spend or save, sometimes savers lose.

@HemiJB91 2 ай бұрын

First question, who the F still has money to invest or save lol. FHSA is a joke. Get that out the way first. RRSP is still the best choice. My employer allows us to claim there matching contribution for filing taxes witch is a bonus. So if I contribute 8k and they put in 9k, thats $17k i can claim. Not all employers do that. Its still better to use the RRSP to buy a house cause you avoid the tax penalty and have to payback what you took out i think, within 10-15 yrs so you dont lose the return rate at retirement. RRSP contribution puts you in a lower tax bracket. TFSA can be good, but like i said, who has money nowadays in canada with a record household debt in the G7 lol

@offnl_ 2 ай бұрын

Hi, is it best to invest RRSP through GIC if I'm considering to withdraw it for HBP?

@LivinginCanada 2 ай бұрын

*This is not financial advice*, but personally, if I wanted to buy my first home, I would first put money into an FHSA, because that doesn't need to be repaid. If that's full, and I need a bigger sum, then I would put some into an RRSP. Considering the current interest rates, I'd invest at least part of the funds in a GICs but make sure that I can redeem it in the time that I'll need the money for the home.