retirement

Last month I covered the pension benefits offered by the government. Will they still be there 20 years from now? I am not sure, so perhaps we should be asking what our sources of retirement income are and how much we will need.

Common sources are pension plans, RRPS and other investments, savings and work. Typically, it is recommended that we will need 70% of what our earnings will be in the years just before retirement.

finance, tax free savings, RRSP, investing

A frequently asked question is whether it is preferable to invest in an RRSP or a TFSA. We would like to receive an answer that is “cut and dry” but that’s impossible since we are all at different stages in our lives and our goals and objectives vary.

To refresh our memories, here is a brief recap of the characteristics of each plan.

RRSP
_ You can contribute up to 18% of your prior year’s earned income to a maximum of $22,000 for 2010;
_ Your unused contribution room is carried forward to the next year;