How I’m Beating Taxes and Building Wealth: My RRSP & TFSA Playbook
By: Felix Diaz, P.Eng.
You’ve worked hard for your income, and now you’re ready to make it work harder for you. That’s exactly where I found myself—not just saving for retirement, but designing a financial system that’s intentional, flexible, and tax-smart. If you’re like me, you want more than just generic advice. You want clarity, control, and confidence. So let’s break it down.
How RRSPs Work (And Why Timing Is Everything)
When I first started contributing to my RRSP, I saw the immediate benefit: a lower tax bill. That’s because RRSP contributions reduce your taxable income. If you earn $90,000 and contribute $15,000, your taxable income drops to $75,000. That move alone can save you thousands in taxes.
But here’s the catch—and it’s a big one. You’re not just deferring tax; you’re agreeing to pay it later. And if you withdraw while your income is still high, you’ll get hit hard. I learned that the RRSP only works if you wait. You’re meant to withdraw in retirement, when your income is lower and your tax rate drops.
RRSP vs TFSA: The Smart Combo
I don’t choose between RRSP and TFSA—I use both. My RRSP is for long-term tax deferral. My TFSA is my tax-free growth engine. Here’s how I balance them:
In high-income years, I max out my RRSP to reduce taxes.
I use the refund to fund my TFSA.
I keep aggressive growth assets in my TFSA—because every dollar of gain is mine to keep.
I use TFSA withdrawals in retirement to supplement income without triggering OAS clawbacks.
This combo gives me flexibility now and freedom later.
Spousal RRSP: Your Secret Weapon for Income Splitting
If you’re married or in a common-law relationship, you’ve got access to one of the most underrated tax strategies: the Spousal RRSP. I’ve used it myself—and it’s been a game-changer.
Here’s how it works: you, the higher-income spouse, contribute to an RRSP in your partner’s name. You get the tax deduction now, reducing your taxable income in the year of contribution. But the account belongs to your spouse, and when they withdraw the funds later, it’s taxed in their hands—not yours.
In my case, I contribute to my wife’s RRSP because she’s not currently working. That means if we ever need to access the funds early—say, in a rare emergency—she can withdraw them and be taxed at a much lower rate than I would. It’s a strategic safety valve that gives us flexibility without compromising our long-term plan.
But there’s a catch: if your spouse withdraws within three calendar years of your contribution, the amount may be taxed back to you under the attribution rules. So I make sure to plan ahead and avoid contributing in the same year—or the two years prior—if we think a withdrawal might be necessary.
Why Spousal RRSPs Work
Tax deduction for you: You reduce your taxable income immediately.
Lower tax on withdrawal: Your spouse pays tax at their lower rate.
Income splitting in retirement: Helps balance retirement income between partners.
OAS clawback protection: Keeps individual income below the threshold.
Example: My Strategy
I earn $120,000/year and contribute $10,000 to my wife’s RRSP.
I save ~$2,900 in taxes that year.
If she withdraws $10,000 later while earning no income, she may pay as little as ~$1,500 in tax.
Net tax savings for our household: over $1,000.
This isn’t just about saving—it’s about designing flexibility into your financial plan. You’re building options, not just balances.
Smart Withdrawal Strategies: My Personal Playbook
I’ve mapped out my RRSP drawdown strategy to avoid surprises. Here’s what I do:
I plan to start withdrawing in my early 60s, before mandatory RRIF conversion at 71.
I’ll keep my income below the OAS clawback threshold (~$93,000).
I’ll shift some RRSP funds into my TFSA during low-income years.
I’ll split income with my spouse to reduce our combined tax burden.
I’ll delay CPP and OAS to boost those payments while drawing from my RRSP.
This isn’t just retirement planning—it’s tax choreography.
RRSP Withdrawal Scenarios: Real Numbers, Real Impact
Let me show you how timing changes everything. These examples are based on situations I’ve modeled for myself and others:
✅ Scenario 1: Withdrawing in Retirement (Age 68)
Income: $40,000 (CPP, OAS, pension)
RRSP withdrawal: $20,000
Tax rate: ~20%
Tax paid: ~$4,000
Net received: ~$16,000
This is ideal. You contributed when your tax rate was high, and now you’re withdrawing when it’s low.
❌ Scenario 2: Withdrawing Early (Age 42)
Income: $90,000
RRSP withdrawal: $20,000 (for debt)
Tax rate: ~35%
Withholding tax: $6,000
Net received: ~$13,000 or less
This hurts. You lose nearly half to taxes and forfeit future growth. I’ve seen people make this mistake—it’s costly.
🏡 Scenario 3: First-Time Home Buyer (Age 30)
Income: $65,000
RRSP withdrawal: $35,000 under HBP
No immediate tax
Repayment: ~$2,333/year over 15 years
This is one of the few smart ways to access RRSP early—if you stick to the repayment plan.
🎓 Scenario 4: Lifelong Learning Plan (Age 38)
Income: $70,000
RRSP withdrawal: $20,000 for education
No tax upfront
Repayment: ~$2,000/year over 10 years
Investing in yourself is always smart—just make sure you repay on time.
🧠 Scenario 5: Strategic Drawdown (Age 60–70)
Income: $25,000 (part-time work + TFSA)
RRSP withdrawal: $15,000/year
Total income: ~$40,000
Tax rate: ~20%
This is my plan. I’ll reduce my RRSP balance gradually, avoid large RRIF withdrawals later, and stay below the OAS clawback zone.
🎯 Final Thoughts: You’re Not Just Saving—You’re Designing
This isn’t just about retirement. It’s about building a financial life that reflects your values, your goals, and your timing. I’ve learned that RRSPs and TFSAs aren’t just tools—they’re levers. And when you pull them with intention, you unlock real freedom.
So if you’re just starting out, automate your contributions. If you’re mid-career, optimize your tax strategy. And if you’re nearing retirement, choreograph your withdrawals. You’ve got this—and I’m right here if you want help modeling your next move.
Ready to Take Control of Your Financial Future?
You’ve seen how RRSPs, TFSAs, and smart timing can transform your savings into a powerful wealth-building strategy. Now it’s your turn to take the next step.
If you’re ready to stop guessing and start planning, let’s connect. Whether you’re just starting out, navigating mid-career decisions, or preparing for retirement, I can help you map out a personalized savings strategy that fits your goals, your lifestyle, and your timeline.
📅 Let’s build your blueprint—one smart move at a time.
Reach out today, and let’s start planning your future with intention.
Email/Phone: diaz.felix@gmail.com; (403)498-4775 or Leave us a message