4. Based on investing $1,000 per year for 20 years with 5% compound interest (assumes middle income tax rates)

5. TFSA Maximum $5,000 year-no income needed Can “carry forward” unused contributions Contributions are not tax deductible Withdrawals are not taxed, and create an equal amount of contribution room (next year) Can contribute at any age RRSP Up to 18% of earned income to max of $22,000 Can “carry forward” unused contributions Contributions are tax deductible Withdrawals are taxable at your effective tax rate at the time of withdrawal Cannot contribute after 71

6. TFSA RRSP TFSA investments are made after you pay tax on the money RRSP investments are made with money that you don’t pay tax on, since the investment is tax deductible

9. The End Thank you

10. Backup Slides

12. Marginal tax rate (contribution/retirement)40%/40%40%/30%30%/40% Contribution (before tax)$1,000 Tax payable$0$400$0$400$0$300 Net contribution$1,000$600$1,000$600$1,000$700 Investment income$2,207$1,324$2,207$1,324$2,207$1,545 Market value*$3,207$1,924$3,207$1,924$3,207$2,245 Tax payable$1,283$0$962$0$1,283$0 Account value (after-tax)$1,924 $2,245$1,924 $2,245 *Assumes annual 6% return over 20 years. Retirement Tax Equal Tax Lower Tax Higher RRSPTFSARRSPTFSARRSPTFSA