go through Ian Bickis
They will also benefit from a 20% contribution to the program, with the highest set limits, as like other registered savings options, the government provides people with rewards for their main life goals for saving money, such as school, retirement and buying a first house.
Ideally, Canadians want to maximize their contribution rooms on all savings plans, but with unemployment, cost of living and overall economic uncertainty growing, it is becoming increasingly difficult to do, which requires a difficult choice of how to sprinkle savings among a variety of options.
It’s obvious that if they can give up anything in the first place, few savers can add everyone to them.
Statistics Canada data shows that in 2023, 11.3 million taxpayers contributed to registered retirement savings plans or tax-free savings accounts, which are about half of the workforce that year. Of these, only 2.5 million contributed both. About 484,000 tax filings also contributed to the first housing savings account established in 2023.
The consultant said that given the range of options available, it is critical to drawing your goals and schedule when trying to allocate cash.
The first step is knowing you have to work with it, says Jordan Damiani, senior wealth consultant at Meridian Credit Union.
“You start with the surplus money you can save,” he said.
For some, this may mean first and foremost going through a basic budget, especially when they try to put the money aside, while others just need to double-check the amount they have given up still makes sense.
From there, depositors need to look at various goals in the time frame and expectations of revenue, Damiani said.
He said TFSA is often the most meaningful for young Canadians because it provides the greatest flexibility, while those in school or just starting a career don’t need to get too much from the tax breaks offered by other registered accounts.
Despite the name of TFSA, it is important to remember money in this account and it can be invested in investments such as stocks, ETFs and bonds to increase the growth of tax-free gains. When a person with a Social Security number turns 18, the TFSA contribution room begins to accumulate, with the starting amount starting at $7,000 this year.
“You always start with TFSA and say, well, this is your emergency fund, this is your liquid bucket, and then you start to be more specific about your goals,” Damiani said.
If someone determines they want to buy a home, they can open the FHSA, which offers tax relief for any donation, with a limit of $8,000 per year and up to $40,000.
“If you put your money in your first home savings account first and they have a lifetime emergency, or they want to buy a car, you won’t be able to take the money out without a fine to cover those costs. So, it’s a balance.”
If you are not sure, you can open an account and start accumulating a contribution room without actually adding money to the account, Damiani said. Savers can also put money into their RRSP to save on their homes, as up to $60,000 of up to $60,000 can be withdrawn from the plan to get to the home (but eventually must be reinvested).
It is important to know the timing. If you may purchase a home in your card in the next few years, you can create a budget to maximize your life limit of $40,000 to maximize your donations.
Similarly, if prospective students get closer to the critical point of the federal government’s echoing competition, then it makes sense to direct more money there.
“When did you want to give you that money? Because it will actually decide which type of registration account to use,” said Sara Kinnear, director of tax and real estate planning at IG Wealth Management.
She said there are ways to create additional funds when it is impossible to contribute to all accounts. One option is to contribute to the RRSP or FHSA, expecting you to generate a tax refund during the income tax filing season that you can use to fund other savings goals.
Talking with a financial advisor can help figure out the time and money allocation, and overall, the sooner you start saving any goals for any goals, Kinnear said.
“For all these types of programs, the longer you can sit there and work for you, the better, because all of these enrollment plans, the funds grow on the basis of tax extensions, and you can benefit from it by taking them over a long period of time.”
Visited once today, visited once today
Consumer Finance Tips FHSA First Housing Savings Account Ian Bickis Personal Finance RRSP Savings TFSA TFSA Canadian Press
Last modified: August 30, 2025
