The Three-Account Framework
Most Ontario families have access to three powerful registered savings vehicles. Using them in the right order — and in the right amounts — can meaningfully improve your retirement outcome.
RRSP: Tax Deferral at Its Best
Your RRSP contribution reduces your taxable income today and lets the money grow tax-sheltered until withdrawal. The strategy: contribute in high-earning years, withdraw in lower-income retirement years. The larger the gap, the bigger the tax advantage.
2025 RRSP limit: 18% of 2024 earned income, up to $32,490. Check your Notice of Assessment for your personal limit including unused room.
TFSA: The Flexible Workhorse
TFSA contributions aren't deductible, but growth and withdrawals are completely tax-free. This makes the TFSA ideal for:
- Emergency funds (withdrawals don't affect OAS/GIS eligibility)
- Income in retirement (no impact on income-tested benefits)
- Holding US dividend stocks (note: US withholding tax applies inside TFSA)
FHSA: New and Worth Knowing
The First Home Savings Account launched in 2023. If you've never owned a home, the FHSA gives you RRSP-style deductions AND TFSA-style tax-free withdrawals — but only for a qualifying home purchase. Contribution limit: $8,000/year, $40,000 lifetime.
If you don't end up buying, you can transfer the balance to your RRSP or RRIF without losing contribution room. Risk-free to open.
The Sequence Question
Which account should you fill first? The answer depends on your marginal tax rate today vs. expected rate in retirement, your home ownership plans, and how much room you have. There's no universal answer — this is where a CFP earns their keep.
Heidi Blondin, CFP®, EPC. Mutual funds are offered through Investia Financial Services Inc.
Mutual funds are offered through Investia Financial Services Inc.
Insurance solutions provided in Ontario and New Brunswick, through Heidi Blondin Financial / Qualified Financial Services.
The comments contained herein are a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. This article was prepared by Heidi Blondin who is a Certified Financial Planner (CFP) at Heidi Blondin Financial a registered trade name with Investia Financial Services Inc., and does not necessarily reflect the opinion of Investia Financial Services Inc. The information contained in this presentation comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability.