Ms . Eli has $ 1 0 , 0 0 0 in pre - tax income that
Question:
Ms Eli has $ in pretax income that she does not need in the current year, but will require in two years to purchase a condo. She is considering whether she should use this money to contribute to a Tax Free Savings Account TFSA or a Registered Retirement Savings Plan RRSP She expects her marginal income tax rate to increase in two years. She expects her invested funds will earn the same rate of return in either account. Which of the following statements is correct with respect to an investment decision?
Ms Eli should invest in the TFSA.
Whether she invests in the RRSP or the TFSA, the effect on her net income will be the same.
Ms Eli should not invest in the either the RRSP or the TFSA since she will need the money in two years.
Ms Eli should invest in the RRSP
Managerial Decision Modeling With Spreadsheets
ISBN: 9780136115830
3rd Edition
Authors: Nagraj Balakrishnan, Barry Render, Jr. Ralph M. Stair