If you need money, take it from your TFSA, not your RRSP!
Walton Financial Group in Barrie, Ontario has advice related to RRSP and TFSA withdrawls
If you are facing a heavy debt load, as much as we all need to take a long-term view with our finances, there are times when living in the moment takes priority. If you need money now, TFSA money can be pulled out in a flash. It’s the ideal emergency fund.
A federal withholding tax applies to RRSP withdrawals – as much as 30 per cent on withdrawals over $15,000 or more in all provinces but Quebec, and 15 per cent in that province. Additional taxes may apply if you’re in a mid- to high-tax bracket because the amount of your RRSP withdrawal must be added to your annual income.
Also, money can be taken out of a TFSA at no cost in most cases, whereas investment companies may charge fees for partial RRSP withdrawals. TFSA money can land in your chequing account in 24 to 48 hours at most, while it can take several weeks for an RRSP withdrawal to be processed.
A further argument against withdrawing money from an RRSP is that you can’t re-contribute that amount later on. You can withdraw money from a TFSA and put it back later, as long as you follow the contribution rules.
Call the Walton Financial Group in Barrie, Ontario to make an appointment with a financial advisor for the best advice regarding RRSP’s and TFSA’s.
