British Expats - Tax time. Am I the only one...

Quote:

Originally Posted by lmartin999 (Post 9263425)

Someone will explain this much better and more fully than me, but remember putting money in an RRSP defers the payment of tax. You will pay tax when you withdraw in retirement. They thus make sense if your income is high now and lower in retirement but are not necessarily great for all. My wife doesn't earn a huge amount so has a TFSA rather than a RRSP.

In theory you benefit from the difference in marginal tax rates between your employment salary and retirement income and also from the growth of the money that would have been paid in tax. In practice those that benefit the most are the insurance companies managing the funds and taking their guaranteed commission.