my65+ is a group retirement plan composed of a group Tax-Free Savings Account (TFSA), a group Registered Retirement Savings Plan (RRSP), and a group Registered Retirement Income Fund (RRIF).
TFSA
The TFSA was established by the Canadian government in 2009 as a “flexible savings vehicle” for Canadians. When you add funds to a TFSA, you are making contributions from income you’ve already paid tax on. Your contributions grow tax-free while they’re in the TFSA account, and you aren’t taxed on any withdrawals. For 2024, you can save up to $7,000 in your TFSA, regardless of your income. This contribution room grows each year if you don’t use it. The total potential contribution room since the TFSA was created in 2009 is $95,000.i
For those earning less than $50,000 per year, you are generally better off saving in a TFSA. Read more about the best way to save for modest earners.
RRSP
The Canadian government introduced RRSPs in 1957 as a way for Canadians without employer-sponsored pension plans to save money for retirement. When you add funds to save through an RRSP account, you are making contributions from pre-tax income (meaning the amount of your contribution is deducted from your current income before it is taxed). Your RRSP contributions grow tax-free while they’re in the plan but are taxed on withdrawals for retirement income. In 2024, the maximum you can contribute to an RRSP is 18% of your earned income to a limit of $31,560.
RRIF
A RRIF is the account type to which all RRSPs must eventually be converted to, so that you can set up a steady stream of income during your retirement. Your RRSPs must be converted to a RRIF no later than the end of the year you turn 71, at which time minimum payments must be made. You can elect to convert to a RRIF earlier than age 71 to meet your retirement needs.
Tax Treatment
| Contributions | Investment Returns | Withdrawals | |
| RRSP/RRIF | NO TAX | NO TAX | TAXED |
| TFSA | TAXED | NO TAX | NO TAX |
A closer look at TFSAs and RRSPs
With my65+, you can choose how you want to split your savings between your TFSA and RRSP accounts, but the plan offers a suggestion based on your income. For those who earn $50,000 or less, the default option is for members to max out their TFSA on a monthly basis before contributing to an RRSP. This default is based on what is tax-efficient for these members, and considers a lifecycle approach, which prioritizes saving in a TFSA earlier on, when earnings may be lower, and then later on prioritizes adding savings in an RRSP as earnings — and thus tax deductions from RRSP contributions — increase over time.
| TFSA | RRSP | |
| History | Introduced in the 2008 federal budget as a “flexible savings vehicle” for CanadiansCame into effect on January 1, 2009 | Introduced in 1957 to provide a tax-deferred retirement savings account for Canadians without employer-sponsored pension plans |
| Impact on GuaranteedIncome Supplement | No impact | Reduces GIS benefits by at least 50 cents on the dollar per RRSP dollar withdrawn |
| Contributions | Made from after-tax income (no tax deduction for contributions) | Deducted from your taxable income |
| Investment earnings(while your savings arein the plan) | Never taxed | Never taxed |
| Withdrawals | Never taxed | Taxed as income |
| Maximum yearlycontribution | Not dependent on level of incomeAvailable to all Canadians age 18 and over2024 contribution limit is $7,000You can make additional contributions if you have not maximized contributions in previous years | Based on a percentage of your “earned income” for the year, to a maximum set by Income Tax Act rulesIn 2024, the maximum you can contribute to an RRSP is 18% of your earned income to a limit of $31,560 (minus pension accruals if you have a pension plan)You can make additional contributions if you have not maximized contributions in previous years |
| Maximum age allowedfor makingcontributions | None | End of the year when you turn age 71, TFSA |
| Where to find yourcontribution room | The My Account service provided by the Canada Revenue Agency | The My Account service provided by the Canada Revenue Agency (CRA)Your yearly Notice of Assessment, which you receive after your tax return has been reviewed and assessed by the CRA |
Know Your Limits
The amounts that you can contribute to a TFSA and an RRSP are set by Income Tax Act rules. This means that you need to ensure that you don’t exceed your available “contribution room” in all your TFSA and RRSP accounts. Overcontributions are subject to penalties. As a member of my65+, it is your responsibility to make sure you don’t exceed your contribution limits for each account type. The Government of Canada provides additional information about TFSAs, RRSPs, and RRIFs.