In the next few posts, you’ll get to know the basics of a few common investment strategies you can use to increase your savings. The first series focuses on a Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP) and how they compare. Use this TFSA versus RRSP post as a guide. Get in touch with us for help and answers to determine which strategy is right for you.
Preparing to invest: Do this first!
Before you consider investing as a New Dentist, develop a “rainy day” fund to cover basic living expenses such as food and rent should an emergency occur.
Once you have created this “rainy day” fund, you can consider strategies that focus on reducing, deferring or minimizing taxes through tax-sheltered plans such as the ones below – Tax-Free Savings Account (TFSA) and a Registered Retirement Savings Plan (RRSP).
Better now than later
Tax-Free Savings Account (TFSA): A TFSA is a tax-sheltered account that allows you to currently invest up to $10,000 per year without paying tax on the growth it generates. This money can be used for any purpose – for example, you can use it to purchase a practice or save for short-term goals.
Registered Retirement Savings Plan (RRSP): An RRSP is a tax-effective way to save for your retirement. RRSP contributions are tax deductible in the year you apply the contribution and remain tax sheltered until you withdraw the money. Hopefully, you’ll do this when you are older and in a lower tax bracket.
As a New Dentist with a steady and growing income, you have numerous and competing options on how to achieve your financial goals. The good news is our non-commissioned Certified Financial Planners (CFP) at CDSPI Advisory Services Inc. are happy to answer your questions at no cost and with no obligation. We are here to help.
Call: 1-800-561-9401 or Email: email@example.com
*Restrictions may apply to advisory services in certain jurisdictions. Financial planning and advisory services are provided by licensed advisors at CDSPI Advisory Services Inc.
Information on this site is for informational purposes only and is not intended to provide financial, legal, accounting or tax advice.
“Under proposed legislation, the annual TFSA dollar limit for 2015 is increasing from $5,500 to $10,000. The proposed measure increasing this limit is subject to parliamentary approval.”
Source: Canada Revenue Agency