Q&A: TFSA or RRSP?

Question: We are both around 53 years of age and to date we have $20,000 in TFSAs. My husband has $50,000 in an RRSP and I have about $29,000 in my RRSP. We have been advised that we should contribute to non-registered investments as we are late bloomers and would then qualify for the GIS (guaranteed income supplement). Any advice? We hear so many different opinions and some say yes to RRSP and others say no. – Angela

Gordon Pape answers: It’s true that TFSAs are the better choice if you expect to qualify for the GIS. But do you really expect your income after retirement will be that low? Currently, only couples with a combined annual income of less than $20,880, not including Old Age Security, are eligible. To put this in perspective, if you both qualify for the maximum Canada Pension Plan benefit, your combined income would exceed the GIS maximum. I suggest you do a projection of what your approximate income will be after you retire. If it is unlikely to be below the GIS threshold, then keep adding to the RRSPs.

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