Maximize Your Savings in Tax-Advantaged Accounts
In Canada we have 3 tax advantaged accounts to take advantage of: TFSA, FHSA, and RRSP. Max contributions will accelerate your journey to financial freedom.
Tax Free Savings Account (TFSA)
Contribution limit in 2026 is $7,000, same as in 2025 and 2024. So try to get that $7,000 in this year, next year and every year after. You can contribute to a TFSA the minute you turn 18 years old, as of 2009 or as soon as you become a Canadian citizen (whichever is the most recent for you).
Focus on maxing this account FIRST, then worry about the other accounts. You can also look into diversifying your stocks/holdings in this account. Join the community and you can see what stocks we like.
FHSA
The best account for someone who wants to save money to go towards their first home. Focus on this account before RRSP if you have not purchased a home and would like to. Your contributions to an FHSA are tax deductible and you can hold Guaranteed Investment Certificates (GICs), mutual funds, exchanged-traded funds (ETFs) and more in your FHSA account
This account is also applicable to a home buyer that hasn’t lived in a qualifying home in the past four calendar years.
The First Home Savings Account (FHSA) has an annual contribution limit of $8,000 and a lifetime contribution limit of $40,000 as of 2025
RRSP
You can contribute to your RRSP each year up to 18% of your previous year’s income/up to the CRA’s annual maximum, and those contributions reduce your taxable income.
The investments inside your RRSP grow tax-deferred, meaning you don’t pay tax on gains until you withdraw the money. Withdrawals are taxed as regular income, which is why many people take RRSP money out in retirement when they’re usually in a lower tax bracket.
Any unused contribution room carries forward, and you can check your personal limit on your CRA Notice of Assessment or through your CRA online account.
Also max out your employer match!
If your employer matches contributions to a Retirement Savings Plan then make sure to get the most of it!
Check to see if they do
Employers typically match 3-6%
Check with your HR department to confirm your employer’s matching formula and the maximum match they offer. Set your own contribution rate to at least that amount so you receive the full match otherwise you’re leaving free money behind.
Use automatic payroll contributions to keep things simple and ensure you always meet the required percentage.
Finally, make sure your combined contributions (yours plus your employer’s) stay within your RRSP contribution limit, which you can find on your CRA Notice of Assessment, to avoid penalties.
The TFSA Cumulative Contribution Limit:
The total lifetime contribution room for someone who was eligible in 2009 and has never contributed is $109,000. This is calculated by adding the annual limits for each year from 2009 to 2026.
Once you are caught up to $109,000 then you can contribute the yearly limit every year which again is $7,000 for 2026.
Get the $109,000 in your TFSA and make sure it’s invested in stocks. We suggest you join the community if you are close to this monumental goal or on your way to it.
If the information is still confusing then please “click here“
Here are the TFSA annual limits since the program started:
Year — Limit
2009–2012: $5,000 per year
2013–2014: $5,500 per year
2015: $10,000 per year
2016–2018: $5,500 per year
2019–2022: $6,000 per year
2023: $6,500 per year
2024–2026: $7,000 per year
FHSA Contributions:
You can put up to $8,000 into an FHSA each year, with a lifetime limit of $40,000. If you don’t use your full yearly amount, it rolls over—up to $8,000—so you can contribute as much as $16,000 in a single year. For example, if you only put in $5,000 in 2023, you’d have $11,000 of room available in 2024. FHSA contributions can be deducted from your income, similar to an RRSP. So make sure to file your contributions, $8000 off your income saves you money on tax!
Your FHSA can hold the same types of investments you’d keep in a TFSA, including GICs, mutual funds, ETFs, and more.
The money you gain with these investments is TAX FREE if you withdraw it towards your first house (or if you are a home buyer that hasn’t lived in a qualifying home in the past four calendar years). If you take money out for a non-qualifying withdrawal and will be added to your income and taxed.
You can find all of your FHSA details—your contributions, deductions, and total room—on your CRA Notice of Assessment or in your CRA My Account.
RRSP Contributions:
General rule: The limit is the lesser of 18% of your previous year’s earned income or the annual maximum ($33,810. for 2026).
Pension adjustments: If you are part of an employer’s pension plan, your contribution room will be reduced by your pension adjustment.
Carry-forward room: Any unused contribution room from previous years is automatically carried forward and can be added to your current year’s limit.
RRSP is generally used to lower tax on your income. You can deduct what you contribute from your total income so let’s say you make 100,000$, you can deduct up 18% so 18,000$ and you will be taxed on 82,000% total income.
Your RRSP can hold the same types of investments you’d keep in a TFSA, including GICs, mutual funds, ETFs, and more.
The money in this account (including gains made from things you invested in) are taxable when withdrawn. Anything withdrawn will be added to your taxable income that year. The idea is to withdraw from RRSP when your income is lower.
You can find all of your RRSP details—your contributions, deductions, and total room—on your CRA Notice of Assessment or in your CRA My Account.
Maximizing These Accounts Put You in a Class of Your Own
- CRA data from 2020 indicated that just 8.9% of all TFSA holders had maximized their total cumulative contribution room up to that point
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