Canadian Imperial Venture Corporation CIMVF

INVEST vs RRSP vs TFSA

[pg1961]

Assumptions;

initial invest   $5000,  investment doubles and current tax rate is 40%


INVEST            RRSP          TFSA
5000                5000             5000         initial investment
10000              10000          10000       investment doubles
5000                5000             5000         capital gains  
2500                10000           0                amount you will pay tax on if you collapse investment
1000                4000             0                 tax payable at 40%
0                       2000             0                 initial tax benefit
9000                8000             10000        cash in hand


Above is a comparison shows for a short term investment TFSA is best in you investment goes up.  The only down side is that you loose the room in your TFSA if it goes down.

If you are talking long term then RRSP can be better depending on your tax bracket and what you do with the initial tax benefit.

PG