I am 55 and not working, with no pension. Should I withdraw from my TFSA, RRSP or non-registered accounts first?
Before you make that decision, speak to a financial representative and understand what will happen when you withdraw money from each type of account. We are not able to tell you which option is the best one for you.
– Tax-Free Savings Account (TFSA) – Because you make contributions with after-tax dollars, you do not pay tax when you take money out of your TFSA. You don’t pay tax on investment earnings. Withdrawals can affect your contribution room.
– Registered Retirement Savings Plan (RRSP) – your financial institution will hold back the withholding tax on the amount you take out and pay it to directly to the government on your behalf. You will have to report the amount you take out as income on your tax return. At that time, you may have to pay income tax on that amount.
– non-registered accounts – non-registered investment accounts have no special “tax status”. You do not pay tax when you take money out of a non-registered account.
– cost of advice – there may be fees associated with the account where the investments are held, regardless of the type of account. Find out more about these types of fees and charges.
Speak to a tax professional or financial representative before making withdrawals from any account.