|
Tax-Free Savings Account (TFSA) |
Registered Retirement Savings Plan(RRSP) |
| Contributions |
Not tax-deductible |
Tax-deductible |
| Withdrawals |
Tax-free – withdrawals are added to contribution room effective the following year |
Taxed – withdrawals are final and are not added to contribution room |
| Earned income requirement for contribution room |
Contribution room is not based on earned income |
Contribution room is based on earned income |
| Age requirement for conversion/collapse |
There are no conversion requirements for TFSAs |
An RRSP must be converted to a Registered Retirement Income Fund (RRIF) or annuity at age 71 |
| Attribution rules |
Attribution rules do not apply. Give money to a spouse or adult child (age 18+) to contribute to their own TFSA |
Attribution rules may apply to withdrawals from a spousal RRSP under certain conditions |
| Eligible investments |
Mutual funds, stocks, bonds and all investments currently permitted in RRSPs |
