Describe the benefits of tax-deferred savings plans

This focuses on the distinction between TFSAs and RRSPs for tax purposes.

1.Tax Free Savings Accounts were introduced in 2009 as a new type of tax deferred savings plan for Canadians. Briefly describe the main differences between a TFSA and RRSP. What are the benefits and drawbacks of each type of plan?

2. What are the important tax planning issues to consider in determining if a taxpayer should make contributions to an RRSP or a TFSA?

3. What are the tax planning opportunities that should be considered in advising a client to contribute to an RRSP versus a TFSA?

4. Which plan do you think is better overall? Would people from different socioeconomic backgrounds prefer the same plan? Why or why not? How would people who differ in age respond when selecting a preferred plan?