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Transferring from TFSA to RRSP
5/27/2017 9:35:59 AM
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Wealth Builder
Gordon Pape writes on common-sense wealth-building strategies.



By Gordon Pape  | Wednesday, December 01, 2010


 

Q – This year the value of my Tax-Free Savings Account (TFSA) has grown by $2,000. If I transfer $2,000 from my TFSA to a Registered Retirement Savings Plan (RRSP) before the end of the year, will I get a tax credit for the $2,000 RRSP contribution? Also, will I be able to contribute an additional $2,000 into my TFSA next year? – Mike M.

A – As far as I can determine, there is no mechanism for transferring assets from a TFSA to an RRSP. But there is no need to do that, and no benefit, because TFSA withdrawals are tax-free.

Simply arrange with the company that administers your TFSA to withdraw $2,000 from the plan. Then use that money to make the RRSP contribution. You will be allowed a tax deduction for the full $2,000.

Assuming you do that before year-end, you will have $2,000 in additional TFSA contribution room in 2011. – G.P.

Gordon Pape is one of Canada’s best-known personal finance commentators and mutual fund experts and a regular contributor to the Fund Library. Click here to submit your question to Gordon.

Personal Opinions & Recommendations Disclaimer

The foregoing is for general information purposes only and is the opinion of the writer. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice. However, please call the author to discuss your particular circumstances.

 
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