Get Free Money from the CRA Now: How to Get Started Today

Free money is available throughout the year in Canada. All you need to do is bring a container or two to collect yours. These containers are called registered accounts and some of the popular ones are FHSA, RESP, TFSA and RRSP.

A registered account allows you to get money from the Canadian Government in the form of grants, tax refunds etc. and the Canada Revenue Agency (CRA) ensures this is properly done. And since 74% of Canadians feel over-taxed, it is a great idea to get something back.

So, which container or registered account(s) should you bring to the party? Below are a set of 4 essential questions to answer for you to get started today.

1. Am I Eligible for a Registered Account?

This is the most important question to ask yourself and the eligibility requirements are summarized below to help you.

• Yes, you're eligible for:

  • RRSP (Registered Retirement Savings Plan): Any Canadian resident under 71 years old with earned income and available RRSP contribution room can open and contribute to an RRSP.

  • TFSA (Tax-Free Savings Account): Any Canadian resident aged 18 or older with a valid Social Insurance Number (SIN) can open a TFSA, with contributions limited to the annual and cumulative contribution limits.

  • RESP (Registered Education Savings Plan): Anyone, including parents or guardians, can open an RESP for a beneficiary who is a Canadian resident, with contributions eligible for government grants like the CESG.

  • FHSA (First Home Savings Account): Any Canadian resident aged 18 or older, who has not lived in a home they owned in the current year or the past four calendar years, can open an FHSA.

    
    

• No, you're not eligible: You can benefit from the tax advantages and growth potential of non-registered accounts (watch out for future blogs).

2. What Is My Primary Financial Goal?

Answering this question will help you to determine the most relevant account for you depending in your needs and situation.

• Buying a First Home:

  Open your FHSA if you plan to buy your first home soon. It combines tax advantages from both RRSP and TFSA.

• Long-Term Retirement Savings:

  Consider the RRSP, which offers immediate tax deductions and is geared towards retirement.

• Short-Term Savings:

  A TFSA is flexible for short-term to medium-term goals, like a vacation, emergency fund, or even supplementary retirement savings.

• Saving for a Child’s Education:

  An RESP is ideal if you’re saving for a child’s post-secondary education, with government (CESG) grants boosting contributions. CESG pays you 20% on contributions annually (up to $500 per year). Payments are income-tested.

3. How Soon Will I Need the Money?

Not all accounts are created equal and some might lock in your funds until you're able to make an eligible withdrawal. Reach out to discuss the details but here's a quick guide:

• Short-Term (1–2 years): Use a TFSA for liquidity and tax-free withdrawals.

• Medium-Term (3–15 years): Consider an FHSA or RESP, depending on your goal. FHSA is for a home, while RESP is for education.

• Long-Term (15+ years): RRSP may work for you, depending on your retirement and flexibility needs.

You can withdraw at any time, for any reason, without penalties or conditions with a TFSA while FHSA, RRSP, and RESP have specific conditions for withdrawals.

4. Do I Have Taxable Income?

• Yes: Both FHSA and RRSP will help you get back some of the taxes already deducted or payable from your income.

  
  

• No (or low taxable income): You can still benefit from either the TFSA or RESP without an active income source. Spousal RRSP can also work for you where your spouse contributes on your behalf.

  
  

⚠️Note that most of the prescriptions above are generic and they do not take your specific needs into consideration so you need to reach out for a free consultation to determine what would work best for you.

Let's Get Started!

You now hold the key to unlock the powerful benefits of Canada’s registered accounts—your personal containers for financial success. Whether it’s saving for your dream home, securing your retirement, or giving your children the best educational opportunities, these accounts allow you to take advantage of the grants and tax savings already available to you.

The journey doesn’t end with knowledge; it begins with action. As an expert financial advisor, I’m here to help you choose the right containers, optimize your contributions, and maximize your returns. With tailored strategies and ongoing guidance, we’ll ensure your financial goals are met, and your wealth grows year after year.

Let’s work together to make your financial dreams a reality. Reach out today, and let’s start filling your containers with opportunity!