RRSP vs. Cash account

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Hey guys, I have a RRSP and TFSA set up with Canada Life in segregated funds. This is something I’ve had set up since I was a teen. Currently my TFSA is maxed and I contribute enough to my RRSP each year to get the maximum benefit come tax time. Naturally, I decided to get into investing in stocks as those two were maxed out, so I opened up a cash account. My cash account now sits at about 30% my total investments (RRSP/TFSA/Cash account). I never really thought of the tax implications at the time as I was just getting my feet wet, but now that tax season is coming up I’m starting to wonder why I even opened a cash account in the first place. I don’t need access to any of this money until retirement so even though I wouldn’t reap the benefits of lowering my tax bracket as I already have it maxed, would it not be a lot better to grow this money tax free and not need to worry about capital gains till I’m retired? If so, is there any way of transferring all my holdings from a cash account to a RRSP?

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Asked on February 18, 2021 10:12 pm
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Haha that is very true, I’d eventually like to transfer everything over into self directed investing. Right now I just want to make sure that I’m good at it and know what I’m doing before I take that jump.

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Posted by Connor Frank
Answered on February 19, 2021 1:24 pm
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You know, the thing about taxes, especially when you're FORCED to pay them, just means you're doing well haha.

Glass half empty, you've got to pay taxes on your cash account. Glass half full, you've got maxed out tax sheltered accounts earning you income!

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Posted by Dan Kent
Answered on February 19, 2021 8:12 am
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Edit: Okay, never mind. Didn’t realize there was a 1% over contribution penalty on RRSPs I thought it was just TFSA’s. *sigh* Looks like my only option is a cash account

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Posted by Connor Frank
Answered on February 18, 2021 10:23 pm