TFSA vs RRSP

Canadians have never had so many rewarding ways to help their hard-earned money go the distance!

What is a RRSP?
A Registered Retirement Savings Plan (RRSP) is an investment account that allows you to save money for your retirement while lowering your income tax. RRSPs build your wealth over time, and will put more money in your pocket through tax savings today.
Where saving for the future is concerned, a Registered Retirement Savings Plan (RRSP) is one of your wisest options—and we’re happy to help you set one up so that you can be ready to Retire Your Way!

What is a TFSA?
The Tax-Free Savings Account (TFSA) is a flexible, registered general-purpose savings vehicle that allows Canadians over the age of 18 to set money aside, which grows tax-free, throughout their lifetime. Each calendar year, you can contribute up to the set TFSA dollar limit of that given year, plus any unused TFSA contribution room from the previous year—as well the amount you withdrew the year before. The annual TFSA dollar limit for 2021 is $6,000.00.  The cumulative contribution limit in 2021 is $75,500.

The biggest determining factor for TFSA vs. RRSP is your income now vs. at retirement.

If your income now is higher than it will be at retirement, then the RRSP is the most effective option for tax efficiency. If your income now is lower than it will be in retirement, then the TFSA is the most effective option for tax efficiency.

With this in mind, our strategies will usually include both components, just weighted differently depending on your unique situation and financial goals.

Why Choose a TFSA?

·  Grow your savings tax free
When you invest in a TFSA any investment growth that is made through the account is not taxed.

·  Withdraw with ease
You can withdraw your funds from a TFSA at any time without penalty, plus withdrawals don’t count as income for taxation purposes (you already paid the taxes before you invested).

·  Keep your benefits
When you withdraw income from your TFSA it doesn’t affect your eligibility for income-related benefits and tax credits such as Old Age Security or Child Tax Benefit.

Why Choose a RRSP?

·  For retirement and more
In addition to retirement, RRSPs can also be used for first-time home buyers and education costs through the Home Buyers’ Plan or Lifelong Learning Plan.

·  Lower your tax bill today
Regular contributions to a RRSP during working years will lower your tax bill when your income is usually highest.

·  Tax-deferred growth
Investments grow tax-deferred. Funds are withdrawn at retirement and typically in a lower tax bracket.

Get started on the right path by booking an appointment today!

Contact Us

Our members may be impacted by an issue causing their debit cards to be declined at some Point of Sale (POS) terminals and Automated Fuel Dispensers (Gas Pumps).  This is not a credit union debit card issue.

This problem is impacting financial institutions that have issued new debit cards supporting the Interac Mandated changes of Combined Data Authentication (CDA).  Member transactions with these CDA cards will be declined when the member is required to use the PIN (Contactless impacted when spend limit exceeded or cumulative spend exceeded) at some POS terminals.  However, the member will be able to process transactions using Contactless (no PIN and insert) and the CDA debit cards continue to work at all ATMs.

For VantageOne members this means any MemberCards that we ordered through the banking system or were auto-renewed in 2019. MemberCards issued in branch are not affected.

This issue was first brought forward (December 17th) by one credit union and, at the time, it appeared to be an isolated situation. CCUA staff escalated the problem to Interac to investigate.

Everlink provided to Interac a sample of test cards to assist with the investigation.
Interac concluded that this was not card related as all CDA cards issued by credit unions had been certified using Interac’s third-party agent.

On December 31st CCUA staff identified that several more credit unions have been impacted by this issue and the problem has continued to spread.

Interac has now confirmed that this is a hardware terminal issue at some merchant locations.   The vendor, Verifone, has been able to replicate the error and identify the bug causing the declines.  We are anticipating further updates from Interac on the resolution to this issue and will update credit unions when received.

This is not only impacting credit unions, as several banks have identified the same issue, and it also appears to impact credit cards at the same terminals.


If you experience an issue with your debit card you could
Split your transaction in two to allow for Contactless transactions.

We recommend to have cash on hand as a back up until this issue is resolved.

Interac has now issued a customer alert on its newsroom. https://newsroom.interac.ca/intermittent-interac-debit-chip-and-pin-card-purchase-declines/

To better protect you from fraudulent online activity, on January 8th, we are adding a Credit Card Payment Waiting Period to newly added credit cards that you add through online banking.

What this means is, once you’ve added a credit card to your account through online banking, you will need to wait before you can make your first payment. This is only for newly added credit cards and only for the first initial bill payment towards it. This has no affect on credit cards that you already have attached to your account.

If you call our Solution Centre or come into a branch we can add the credit card to your account that you can pay right away or make that first initial bill payment if you added it online!

We also recommend setting up Mobile Alerts to notify you of various account changes when they occur.  Check them out!  You will find the link for Mobile Alerts on the left-hand side of the screen, after you log in to online banking, under ‘Messages and Alerts’.

 

Please contact your branch today for full details and we can assist you with all your financial needs!