QUESTION 6

1. Ms. Walters has $22,000 in pre-tax income that she does not need in the current year, but will require in two years to purchase a condo. 

   She is considering whether she should use this money to contribute to a Tax Free Savings Account (TFSA) or a Registered Retirement Savings Plan (RRSP). 

   She expects her marginal tax rate to increase in two years. 

   She expects her invested funds will earn the same rate of return in either account. 

   What would you recommend that will infuence her investment decision?

Please answer according to the tax rules 2020-2021 in Canada with explanation