Friday, January 26, 2024 5Brooklin Town Crier At first glance, many investors are left wondering whether they should invest in a Tax-Free Savings Account (TFSA) or an Registered Retirement Savings Plan (RRSP). Both offer tax advantages, but deciding which account is more appropriate for you depends on your goals, risk tolerance and time frame. TFSA and RRSP Similarities Both accounts offer tax advantages. Plus, both accounts allow you to invest in mutual funds, stocks, segregated funds, bonds and Guaranteed Investment Certificates (GICs), to name a few. Registered Retirement Savings Plan features include: 1. Contribution limits Your allowable contribution is $30,710 or 18% of earned income, less pension adjustment for 2023. Unused contribution room can be carried forward to future years, and contributions can be made to an individual, group, or spousal RRSP. 2. Contributions are tax deductible Allowable contributions are deducted from your gross taxable income for the year, and you may end up with a tax refund (which many recommend putting right back into your RRSP for next year or even a portion into your TFSA). This makes an RRSP an ideal first choice for savings especially for high-income earners. 3. Defer the taxes Investments inside an RRSP grow on a tax-deferred basis; tax is payable when funds are withdrawn. Funds typically stay invested until you start income payments in your retirement years. RRSPs must be converted to a Registered Retirement Income Fund (RRIF) by the end of the year you turn 71. Withdrawals from RRIFs are fully taxable, and annual withdrawal amounts may reduce government Old Age Security benefits. Those with a rich pension plan, are working in retirement, or have other sources of alternative income, may want to consider additional savings options, such as a TFSA, in consultation with a financial advisor. 4. Estate considerations An RRSP (or RRIF) can transfer directly to your spouse or commo-law partner upon your death on a tax-deferred basis when he or she is named the beneficiary directly on the account. Tax Free Savings Accounts 1. Contribution limits As of January 1, 2023, if you have reached the age of majority, you can contribute up to the maximum annual amount of $6,500. Any unused contribution amount can be carried forward to future years. If you have never contributed to a TFSA before and were at least 18 years old in 2009, your accumulated contribution room was $81,500 in 2022. 2. Tax free Your annual contribution is not tax-deductible and any growth in your TFSA investments is sheltered from taxation even when money is withdrawn. You can withdraw TFSA money without paying tax at any time and, best of all, the full amount of any withdrawals can be put back into your TFSA in future years (but not the same year). 3. Impact of eligibility on government benefits Income earned in a TFSA and amounts withdrawn do not affect your eligibility for federal income-tested benefits and credits, such as Old Age Security or the Canada Child Tax Benefit. 4. Estate considerations You can set up the account's assets to transfer directly to your spouse or common-law partner upon your death, as long as he or she is named the successor holder on your TFSA. While an RRSP is primarily intended for your retirement, you can use a TFSA for any longterm investment goal. This article was written by Edward Jones for use by your local Edward Jones advisor. RRSP or TFSA: Which one makes sense for you? by Brian Evans, Financial Advisor THIS ARTICLE IS A PAID ADVERTISEMENT 20 Broadleaf Avenue, Unit B108, Whitby Office: 905-620-1439 Cell: 905-431-1898 brian.r.evans@edwardjones.com www.edwardjones.ca tary-treasurer for the Whitby School board. John entered politics, dedicating seven years to the Whitby Township council and holding positions like Deputy Reeve and Reeve (1865-1870). His commitment led to his election as the Liberal Member of Provincial Parliament for Ontario South in 1897. The pinnacle of his political career was becoming Ontario's Minister of Agriculture from 1880 to 1905. Family tradition John's son William (1881-1949) carried on the family's legacy of being expert breeders. After graduating from the Ontario Agricultural college in Guelph in 1903, he took over the farm's management though his influence reached far beyond. He held significant roles such as chairman of the Canadian National Livestock Records and President of the Dominion Shorthorn Breeders Association. His noteworthy contributions extended to the establishment of the Royal Winter Fair in 1922, the world's largest indoor fair. Active in community affairs, he was President of the Brooklin Spring Fair Board while his participation in the Ontario Agricultural Commission of Inquiry in 1943 underscored his meaningful contributions to the broader community. The fourth-generation custodian of Maple Shade Farm was John, (1913-2005), who took over its management after earning his agriculture degree in 1935. He, too, held various roles, including founding the Brooklin Junior Farmers and being its President for 20 years. Locally, he directed and presided over the Brooklin Spring Fair while leading the Ontario Shorthorn Club. Beyond farming, he was a Trustee for the Dryden School and the Whitby District High School Board from its founding in 1949 until 1960. Medal winner In politics, he held roles such as Whitby Township Councillor, Deputy Reeve, and Reeve, playing a significant part in Whitby's amalgamation with Whitby Township in 1968. John retired from farming in 1965, going on to earn the Ontario Bicentennial Medal in 1984. Whitby is named after this family. While the farm was sold for new developments, the name has been recognized through Whitby's Dryden Boulevard. But more importantly, the renovated farmhouse, preserved through the efforts of Rick and Brenda Barnes, is now a world renowned diabetes centre, a fitting testament to the Dryden family's history and influence continued from page 4