What is the difference between TFSAs and retirement annuities?

Tax-Free Savings Accounts were created to encourage saving and not as a retirement product, although you may use them for retirement savings. The key distinction is TFSA contributions are made with after-tax money and do not qualify for any deductions against taxable income. Retirement annuity contributions, on the other hand, are made with pre-tax money and are deductible from your taxable income.

TFSAs and RAs also differ with respect to access to funds, investment allocation limits, tax levied on withdrawals and contribution allowances.

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