Personal Investor: Wise millennials choose TFSAs over RRSPs
According to Statistics Canada, 42 percent of millennial investors prefer TFSAs (tax-free savings accounts) over RRSPs (registered retirement savings plans). This means this group, aged 25-34, are willing to give up the instant gratification of a tax refund that comes with the RRSP in favour of gains that are never taxed in a TFSA. A TFSA is particularly beneficial for lower income earners. By not contributing to their RRSP now when they are in a lower tax bracket, young wage earners can carry forward their allowable contribution space to a year when they are in a higher tax bracket. This ensures their tax savings are higher.