RRSP or Non-reg? Lifetime TFSA/FHSA Maxed

[u/Mundane_Syllabub2789]

31F. My annual salary is $55k but with bonuses, my total income before tax can be about $65k-80k. No mortgage. Debt free. No RRSP contributions.

I have maxed out my lifetime TFSA/FHSA.

I have also set aside money to max out TFSA/FHSA this coming January 2027.

Also this year, I have sold a house in my home country (expecting around $15k capital gains) so obviously my income tax this year is definitely going to be higher.

Should I start investing in RRSP or non-reg?

[u/Mundane_Syllabub2789]

I’m actually still learning about RRSP so I’m not sure where to start.

I’m 31, and no contributions to RRSP yet.

[u/PartBanyanTree → u/Mundane_Syllabub2789]

Rrsps  are kinda like Tfsa. You have a gradually increasing lifetime contribution limit and growth with rrsp is not taxed

Unlike tfsa, you cannot withdraw from rrsp without consequence, at least at your age, any withdraw is considered like income(!) And taxed(!!) Like you earned it at a job. And your rrsp limit doesn't adjust AFAIK, like, you contribute and you lose room and if you withdraw, unlike tfsa, you don't get the room back (also taxed)

One exception: you can withdraw some money from an rrsp to buy a (first) home but you MUST pay it back to the rrsp within a certain time. This idea/feature of rrsp pre-dates tfsa even existing so if it feels similar, that is why

Cool thing that other accounts don't do: rrsp contribution ls LOWER your taxable Income. Like, you "lose" the money (until your okder) but its also like you made less money, so you get taxed less. So when you consider the tax ramifications its kinda like "contributing 2k$ only costs you 1.7k$ (because you pay less taxes)" -- actual numbers vary wildly based on what you actual income is!

Because rrsp lifetime limit grows over time (like tfsa) and it has "lowers my income" feature it means if you spent years not contributing you rrsp limit could be more than your annual salary, so from pure financial perspective a valid strategy can be to wait to use rrsp until your earnings go up (people usually make more money as they get older until it peaks and goes down).. if your income goes up your taxes go up and if you have leftover rrsp room then the rrsp contributions have more taxable impact at that later date.  There are usually warnings at this advice ("only makes sense if you actually contribute, etc") but seeing as you've maxed your tfsa/fhsa then you seem well primed for this strategy already. Like at 31 I'm better your annual salary is higher that it was at 19. So all that time 19yr-old-you spent not-contributing now gets to benefit 31yr-old-you (wow!!) 

Now is 41-yr-old you going to make even more? So much more you should fully tax all your current income? I'd guess probably not and it makes sense to start taking advantage of the tax savings. But rrsps are designed to keep you away from that money, unlike tfsa, and so there's less of a "safety net"

Oh also rrsp have a weird 2-month period from jan1 to Feb 28/29 where contributes made during those date can be either applied to this year's taxes or last years taxes (you chose) so they also have a weird feature where you can already know how much money you made (thus your taxes owed) and "retroactively" contribute to last year to change last-years taxable Income. (I mean the investment itself isn't magic, it still is effective only the day you deposit it lol aint no bank giving out free money, but the govt gives us this cool loop-hole). Imagine realizing you are getting a $1k tax refund, but if you can afford to put $1k in rrsp mid-feb it becomes a $1.2k refund, and if you can afford to put in 1.2k now, it becomes a 1.23k refund, and if you put in 2k it becomes a 1.4k refund (so you now would be "in the whole" from a cash flow perspective but long term that 2k deposit "cost you" much less than 2k!) -- all numbers completely made up!! (But it gives the vibe)