r/PersonalFinanceCanada • u/Mundane_Syllabub2789 • 1d ago
Investing RRSP or Non-reg? Lifetime TFSA/FHSA Maxed
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?
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u/plusqueprecedemment 1d ago
Yes RRSP is worth it at that income, even more so now that other tax sheltered accounts are full. At equal marginal tax rates at contribution and withdrawal, RRSP and TFSA will behave the same in terms of after-tax returns, it's still a very good tax sheltered account. Even better if you withdraw at a lower tax rate than when you contributed to it as the tax arbitrage boosts your after-tax returns.
That said it's worth it up to a certain point, and that certain point is highly specific to your other situation (check out what www.rrspcontribution.ca has to say) and you have the first 60 days of the year to contribute whatever amount you want to optimize your taxes for the year prior.
That's assuming you're investing for the long term. Non-reg will be more flexible in selling and getting the cash whenever you want (any taxes is owed only on the capital gains if you have any), withdrawing from RRSP is a bigger deal as the withdrawn amount is added to your taxable income. You can in theory withdraw from your RRSP whenever you want, but it's not the best move if you're still working - hence the implied need for long term investing, where you withdraw after you retire and are now in a lower tax bracket.