The Wealthy Barber Podcast #12 — Mark McGrath: TFSAs vs. RRSPs (15ish Minute Money)
Mar 18, 2025
In this lively discussion, Mark McGrath, an Associate Portfolio Manager at PWL Capital and co-host of the Rational Reminder podcast, breaks down the debate between TFSAs and RRSPs. He reveals why RRSPs often get a bad reputation despite their benefits, including tax-efficient withdrawals. Mark also tackles the implications of government tax changes and how the Canada Child Benefit affects your savings strategy. With insights on the flexibility of TFSAs being a double-edged sword, listeners gain valuable financial wisdom in just 15 minutes!
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RRSP Complexity and Misconceptions
- RRSPs seem simple but have complexities, especially compared to TFSAs.
- Many misunderstand RRSP benefits due to a focus on withdrawal taxes, neglecting the tax-free compounding growth.
Equal Tax Bracket Contributions
- Contributing to an RRSP at one tax bracket and withdrawing at the same bracket yields similar results to a TFSA.
- The key difference is RRSPs use pre-tax dollars, while TFSAs use post-tax dollars.
Rental Property Example for RRSP vs TFSA
- Mark McGrath uses a rental property income example to illustrate the difference between RRSP and TFSA contributions.
- He explains how pre-tax vs. post-tax contributions affect the final amount, assuming the same tax bracket.