Navigating Canada's Registered Savings Plans: A 2025 Overview

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As young Canadians head off to college or university, many benefit from Registered Education Savings Plans (RESPs), which offer a 20% government match on contributions up to a limit. This is part of a broader effort by the government to encourage saving for major life goals—education, retirement, and home ownership.

💸 The Challenge of Saving Across Multiple Accounts
Financial advisers recommend maximizing contributions to all registered plans—RESP, RRSP, TFSA, and FHSA—but rising unemployment, cost of living, and economic uncertainty make that difficult. In 2023:

• 11.3 million Canadians contributed to either an RRSP or TFSA.
• Only 2.5 million contributed to both.
• 484,000 contributed to the newly launched First Home Savings Account (FHSA).

🧭 How to Prioritize Your Savings
Experts suggest starting with a TFSA:

• It’s the most liquid and flexible, ideal for emergency funds.
• Contributions can be invested in stocks, ETFs, and bonds.
• Contribution room starts at age 18; the 2023 limit was $7,000.

If you're planning to buy a home:

• Consider the FHSA, which offers tax-deductible contributions up to $8,000/year and $40,000 lifetime.
• Funds must be used for a home purchase—withdrawals for other needs incur penalties.
• Alternatively, up to $60,000 can be withdrawn from an RRSP for a first home, but must be repaid.

For education:

• RESP contributions are matched by the government until the end of the year the beneficiary turns 17.
• Timing contributions before that cutoff is crucial to maximize benefits.

🧠 Smart Strategies & Timing

• You can open accounts to start accumulating contribution room—even without immediate deposits.
• Consider contributing to RRSP or FHSA to trigger a tax refund, which can then be used to fund other goals.
• The earlier you start saving, the more you benefit from tax-deferred growth.

💬 As Sara Kinnear of IG Wealth Management puts it:

“When do you want to have this money available to you? Because that’s going to dictate realistically which type of registered account you want to use.”

For the original article, please see:  RRSP, TFSA, FHSA, RESP: The ABCs of how to divvy up savings across accounts

Please contact financialaid@ambrose.edu if you have any questions.