The Weekly Lineup – RRSP and TFSA Edition

Tax refund!February 29th 2012, is the final day to make a contribution to your RRSP for the 2011 taxation year. Like most Canadians, you probably scramble at the last minute to find some extra cash, or even take out an RRSP loan. You probably don’t give much thought to your overall RRSP strategy – other than the impending refund. But you should!

If you’re looking for some answers on the eternal RRSP and TFSA conundrum, here are some great posts and ideas from around the web to help you out:

Make Monthly Contributions

Young and Thrifty gives some great back-to-basic advice, and tells people don’t even bother trying to make a lump-sum investment for your RRSP in Did You RRSP Yet? She suggests just making monthly contributions all year round, and then top-up with a lump-sum payment if you need to. This is simple but sage advice, which I think more people should take to heart! Y&T was also featured in MoneySense Magazine, in How Do You Contribute To Your RRSP? Way to go Young!

Maximize Your RRSP Contribution

The Passive Income Earner wrote a stellar post on how to Maximize Your RRSP. He did some serious number crunching in this post. He actually found out that using your RRSP refund to contribute to your TFSA, is more advantageous than using the refund to pay down your mortgage. The reason is simple, for the six years you gain in paying off your mortgage – you lose out big-time on the overall growth of your investments for your nest-egg. This is where long term planning really pays off!

Optimize Your RRSP Contribution

My Own Advisor (not really my advisor) wrote an exceptional post last May on how to optimize your RRSP contribution, in I’ll maximize my TFSA first, thanks. The premise is simple – make the minimum contribution to your RRSP to avoid paying extra tax, and then maximize your TFSA! MOA discusses in-depth why he prefers this strategy.

Forget the RRSP! Contribute to the TFSA

I’ve become a huge fan of the TFSA. The main advantage of the TFSA over the RRSP is you can withdraw money from a TFSA tax free. This makes the TFSA an ideal way to save for retirement. You can save tax-free, withdraw tax-free, and reduce the amount of taxes you pay in retirement. If you are not a high income earner, or you don’t expect to be able to max out either the TFSA or the RRSP, then consider contributing to your TFSA first!

I covered this last week in, Should I Contribute to My TFSA or RRSP?

In a previous post last year, Max Out Your TFSA, and Forget the RRSP.

Of course there isn’t a one shoe size that fits all when it comes to your RRSP or TFSA. The bottom line is you should really speak with a tax expert, financial planner, or your accountant, before making any important decisions. You may find after reviewing your taxes and investment situation that an RRSP, TFSA, or a combination of both is best for you!

Thank You!

A special thank you goes out to all my newsletter subscribers, who re-confirmed their emails and are now following these posts with Feedburner. It just made more sense for us to work on keeping the posts current, and writing the Weekly Lineup on the Dividend Ninja – so thanks again!  As I’ve mentioned in the newsletters, I’m always delighted to hear from readers and value your support!

Who Got A Facelift?

Also if you didn’t notice, Young and Thrifty also got a facelift (well on the web actually), and yours truly did the redesign! Although we launched the site in January, I’ve been meaning to let everyone know. Go check it out in her weekly ramblings Facelift Edition. It was a delight to meet Y&T, and work on her site for her!


If you enjoy reading the Dividend Ninja, don’t forget to also subscribe and get the Ninja delivered right to your inbox (and if you don’t like it – subscribe anyway). Thanks for reading!

Have a nice weekend everyone! 🙂

9 Responses to “The Weekly Lineup – RRSP and TFSA Edition”

  1. That’s a good list! Thanks for the mention.

    I have been thinking about one thing … What if I take my TFSA after a while and put it in my RRSP. That can be a large tax refund which you put back in the TFSA. Like you, I like the benefits of the TFSA but if you can get access to more founds to put at work for you, why not? Just a thought … I’d be curious to hear what people think.

  2. The Dividend Ninja

    Feb 03. 2012

    PIE I can understand why it would be tempting to do this, becuase if you transferred the TFSA (now 20K) into an RRSP you would get 7K or more back. In your case it might make sense.

    However place yourself ahead in the future, when you are 71 and have to convert all this over to a RRIF, and start making taxable withdrawals. Why not just leave it in the TFSA in the first place so you can take the money out tax free? It still compounds at the same rate.

    By transferring from your TFSA to your RRSP you’ve taken tax free income and made it taxable at a future date, even though you get a refund.


  3. youngandthrifty

    Feb 03. 2012

    Hi DN!

    Thanks for the double mention and I really enjoyed your round up- it was great (and not only becuase yours truly was in it haha)!

    Congrats on the newsletter subscribers!

  4. My Own Advisor

    Feb 04. 2012

    Thanks very much for the mention!

    Have a great weekend. Looking forward to your posts next week.


  5. Doctor Stock

    Feb 04. 2012

    It’s interesting how the TFSA has really become an excellent vehicle, especially for the young, to save and invest. During the years of highest debt, lowest income, and greatest need for flexibility, the TFSA shines! I just wish they had them when I started out.

    • The Dividend Ninja

      Feb 04. 2012

      Doctor Stock Thanx for posting. Well if only the young realized just how good it is! Yes I sure wish the TFSA was around when I was younger too. But as they say, it’s never too late!


  6. Hi Ninja,

    Great job on the facelift of’s site! I really like the design, very clean, simple yet elegant.


    • The Dividend Ninja

      Feb 05. 2012

      Hi Kanwal, thanx for the feedback on Y&T’s site. Yah it does look good if I may say so myself. 🙂 She had a very precise idea of what she wanted, which made it a lot easier for me to come up with the redesign.