Let's talk about money

RRSP = Registered Retirement Savings Plan
· Tax deferred: income tax paid later, when you withdraw (most likely at retirement) -> use that tax return to invest now and let your money grow, otherwise defeats main benefit of RRSP
· At withdrawal: taxed on contribution plus investment return
· No tax if you withdraw to buy a house or for education, but must be paid back and eligibility required
· Annual contribution room = 18% of your gross salary (B4 taxes), to a max of $27,230 for 2020
· Government tracks your RRSP account and knows when you’ve over contributed. Penalty = 1% tax per month until excess amount withdrawn

TFSA = Tax Free Savings Account
· Tax free: no tax on investment return, and tax already paid on contribution amount (it’s after tax dollars). So no taxes to pay when withdrawing
· Contribution room earned automatically as of 18 years old, a pre-determined annual amount chosen by Canada Revenue Agency
· Government does not track your account, you're responsible to make sure you don't over contribute. Penalty = 1% per month until excess amount withdrawn

More info TFSA https://bit.ly/33RYNla
More info RRSP https://bit.ly/30b8Qky