Invest Smart and Save on Taxes with RRSP and TFSA in Canada!

While income taxes in Canada are not the highest in the world, a considerable portion of your income can go towards taxes! A Canadian resident who makes around $100K can expect to pay anywhere between $24K-34K in income taxes depending on which part of Canada they are living.

The Government of Canada offers certain schemes that you can use to your advantage to help increase your net worth and reduce your taxes.

Registered Retirement Savings Plan (RRSP)
Investing through an RRSP account can help you reduce your taxable income for the year. You do get taxed when you withdraw the money however since you are deferring the taxes from your peak earning years to your retirement years, your income/tax may be lower.

Tax Free Savings Account (TFSA)
As the name suggests, any gains that you have through your TFSA account are considered tax-free! It is highly recommended that you use the TFSA account to your full advantage and max it out every year!
Best of all, you can withdraw the money whenever you want as well!

I would recommend you to take advantage of both investment accounts and help reduce your personal income tax!

Note – I am not an investment/tax advisor.

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