Is it better to invest in RRSPs or in a non-registered account?
For the average Canadian taxpayer, it is usually better to invest in RRSPs, because:
you will probably be in the same or a lower tax
bracket when you retire
your investment income grows tax-free inside the RRSP
you can invest in stocks, bonds, foreign and other
investments without worrying about the tax implications
you are less likely to withdraw the money than if you
are saving it in an unregistered account, so you will
build up a sizeable nest egg by retirement
It may be better to invest in a non-registered account (outside of
you will be in a higher tax bracket after retirement,
you invest all your money in investments which
produce capital gains or eligible
Canadian dividends, and
you are comfortable not owning any bonds or other
interest-producing investments, and
you do not sell any investments until retirement,
because the sale would generate taxable capital gains.
most people should invest in RRSPs.
Revised: April 05, 2014