RRSP, TFSA, or both?

Your Scotiabank advisor can help you determine how to best make these plans work for you, by considering some of the following: 

The more time you have until retirement, the more opportunity for your investment to grow. Your advisor can calculate whether investment growth in a TFSA, which is tax-free, will outweigh an investment in an RRSP, which is tax-deductible today, but taxable down the road.

Are you maximizing your RRSP contribution? Depending on your tax situation and your goals, it may even be advisable to reduce your RRSP contributions and direct some of your savings to a TFSA.

If you are in a low tax bracket now, you may not be making the most of the tax savings from an RRSP. You might be better off contributing to a TFSA now. If your income rises in future years, you could still withdraw money from your TFSA and contribute it to an RRSP, provided you don't exceed your maximum contribution room.

Do you already have a large RRSP or a generous pension plan? If so, you may want to direct more of your savings to a TFSA, since the tax on these savings is effectively pre-paid. That means withdrawals from your TFSA will not count as taxable income, and you may be able to avoid claw-backs to your Old Age Security pension and Guaranteed Income Supplement during retirement.