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Making the Right Decisions for Your Savings Takes Careful Planning

January 4, 2022 7:00 AM | News

The following is a sponsored advertorial on behalf of Access Credit Union.

Access Credit Union

Access Credit Union can help you set up a smart savings plan.


Canadians have two options for saving and there are advantages for each: Tax-Free Savings Accounts (TFSAs) or Registered Retirement Savings Plans (RRSPs). They can be used together to build a savings plan that’s right for you. We recommend speaking with an advisor, who can review your current and projected financial circumstances and help you build a personalized retirement savings plan.

Tax-Free Savings Account (TFSA)

A Tax-Free Saving Account is an account in which investment or interest income is earned tax-free. Since contributions are made from funds that have already been taxed, there is no tax payable when money is withdrawn from a TFSA.

There are a few rules that are important to understand when contributing to a TFSA:

  • TFSA contribution room accumulates every year. For 2021, the limit is $6,000.
  • When you contribute less than the maximum annual contribution, the difference is referred to as the unused contribution room.
  • Contribution room is cumulative. Any unused contribution room at the end of the year is carried over to the next year. As of 2021, the total TFSA contribution room is $75,500. If you withdraw funds from your TFSA, you do not lose contribution room. The amount withdrawn is added back to your contribution room in the following year.

Registered Retirement Savings Plan (RRSP)

Contributions to an RRSP are tax-deductible, meaning that when you contribute to an RRSP, you are reducing your taxable income by the amount of money you contribute to the plan.

If you withdraw funds from an RRSP, the amount withdrawn will be added to your income in the year of the withdrawal and taxed at your marginal tax rate. As a result, RRSPs are normally treated as long-term investments.

Did you Know?

You can make all or part of your contributions in the name of your spouse or common-law partner? As the contributor, you are still entitled to the tax deduction, but putting contributions in your partner’s name enables you to split your income and reduce tax implications when receiving the income.

Make your RRSP or TFSA contributions online!

With online banking, members have the ability to contribute to their Variable Tax-Free Savings Account (TFSA) or Variable Registered Retirement Savings Account (RRSP) within online banking. Try it today!

If you’re looking for an investment solution, both RRSPs and TFSAs are great savings tools. Visit our website at accesscu.ca to learn more about our registered investment products and how they can benefit you.

Tags: Manitoba