Investing in Your Future with Tax-Free Savings

Having emergency reserve investments outside of your RRSP is important. With the new government Tax Free Savings Account (TFSA), your money can grow tax-free till you need it. A rainy-day fund is an important part of any financial plan, learn how you can make yours grow using one of the most flexible saving options available.

For most Canadians, saving into a Tax-Free Savings Account is the best place to start to build an emergency reserve, or save for something you have been dreaming of. Any money you saved outside your registered plans could be subject to taxes on the growth. With a TFSA, your savings can grow tax-free—allowing you to save more efficiently.

RRSPS

• Tax deduction on any contributions reducing your income tax
• Tax-free growth
• Fully taxable when you withdraw

TFSAs

• No tax deduction on contributions
• Tax-free growth
• Tax-free when you withdraw the money

Your RRSP is a great place to save to reduce your income tax, but that money is then 100% taxable when you want to withdraw it (with a few exceptions).  A TFSA does not give you the income tax dedication RRSPs provide; however, your money is still able to grow and be withdrawn tax-free.  Contact AAM Financial today to get expert advice on which investment vehicle is right for you and your family, and how tax planning can make a significant impact on your overall financial plan.