Personal savings

There are many types of personal savings vehicles. Whether you invest in real estate, a registered retirement savings plan (RRSP) or a tax-free savings account (TFSA), your investments must be sufficient for you to maintain your standard of living once you retire.

There are two main types of investments: registered investments and unregistered investments.

Registered investments

These investments offer tax advantages. RRSPs, for example, enable you to reduce your taxable income when you make contributions to it. Payment of income taxes can then be made when amounts are withdrawn.

Regarding TFSAs, savings can be made without accrued interest having a tax effect. Although contributions made to a TFSA are not tax deductible, amounts withdrawn are not taxable. Therefore, they are not considered as income in the calculation of the Guaranteed Income Supplement (GIS).

Unregistered investments

These include all amounts not held in a savings vehicle offering tax advantages. Investment income is therefore taxable. Bank accounts and equities are some examples of unregistered investments.

For more information, see Choosing your savings vehicle.