Investments

Carry forward & reuse contribution room - Unused contribution room can be carried forward to be used in subsequent years. You may also credit withdrawals that you have made back to your contribution limit after the year in which the withdrawals were taken.

Supplement RRSP savings - if you are contributing the maximum possible into a RRSP, investing money into a TFSA allows you to draw income from it when you retire, without paying any tax on the withdrawals.

Reduce income tax burden - some forms of income are taxed at a higher rate than others. A TFSA offers you the option of investing in all forms of income generation without incurring any tax consequence.

Protect your financial position - if you have a low income and therefore receive money from government programs such as the Canada Child Tax Benefit, the income you receive from your TFSA will not affect the amount of benefit you receive.

Earnings are tax free - providing that you keep investment earnings in the plan, you won't pay tax on them.

Contributions are tax deductible - Contributions you make to your RRSP can be used as a deduction on your annual tax return. What's more, you can carry forward this allowance to future years.

Contribute to a spousal RRSP - you can more equally split your retirement income between you and your spouse by contributing to a spousal RRSP.

Tax-free withdrawals from your RRSP - You can withdraw funds from your RRSP, with certain conditions, for educational expenses and for purchasing a first home. Rules for these programs can be found on the CRA site.

Transfer from saving to income when you retire - Move the funds invested in your RRSP to an Annuity or a RRIF at the time of your retirement. You will receive regular payments that will be taxed when you are typically in a lower tax bracket.

Benefit from tax-free savings - provided that the earnings you make from investments are not withdrawn from the RESP, you will not pay tax on them.

Take advantage of government grants - If you have been approved to receive the Canada Education Savings Grant, established by the federal government, it will be paid to your RESP as a percentage of your contributions until you reach the maximum level, as prescribed by CRA. What's more, families on lower incomes may also receive money via the Canada Learning Bond. Some provinces, including Alberta, Quebec and Saskatchewan, also offer additional grants to eligible individuals.

You choose your investment options - you decide which investments are best matched to your financial goals and appetite for risk.

Others can contribute towards a RESP - a friend or family member may set up a RESP for your child.

The beneficiary of the RESP is responsible for the tax - Educational assistance payments can be drawn from the RESP if the beneficiary is enrolled in an approved post-secondary educational institution or program. The withdrawals are taxable in the hands of the student, which will be beneficial as the child is likely to have little or no income, therefore, lowering the tax burden.

Protection against investment losses - between 75% and 100% of your investment is protected so long as you abide by the rules relating to withdrawals (example: your funds must be held for a specific length of time).

Reduce probate fees - so long as your beneficiaries are named in the contract, segregated funds bypass the estate, eliminating fees paid to probate.

How to get the most from your savings