My TFSA RRSP Portfolio Is A 40/60 Split

One of the major (only?) financial undertakings I’m managing this year is building the “perfect” TFSA RRSP portfolio, with everything appropriately balanced and in the right accounts. If you’ve read my posts about whether or not to investing in a TFSA or RRSP and the basics of index investing, you already know there’s some intricacies to getting to six-figures beyond simply depositing money each month.

My primary goal in 2015 is increasing my net worth by $100/day or $36,500 for the year. Where this money goes is primarily determined by tax minimization, which means that for me, the RRSP is going to see bigger gains than my TFSA this year and, I assume, for every year from now on. This is simply because the current contribution limit on the tax-free savings account is only $5,500 per year, whereas the RRSP is 18% of my gross income. Additionally, I have a lot of catching up to do in my RRSP compared to my TFSA!

My TFSA RRSP Portfolio

At this point, I’m not expecting to max out either my RRSP or TFSA in 2015,

but I will be striving to get towards a $100,000 investment portfolio, with at least $40,000 in my TFSA and $60,000 in my RRSP.

Screen Shot 2015-02-04 at 9.02.27 PM

My $40,000 goal is higher than the $36,500 contribution limit for the TFSA even though it’s underfunded because I’ve been using the TFSA as an investment vehicle for a few years, and have luckily earned enough interest and dividends such that when my account is fully funded, it will exceed the limit by a few thousand dollars. Ideally, I’d like to get the gap between my TFSA balance and the contribution limit as far apart as possible, but because I tend towards more conservative investments in my registered accounts which limits bigger gains.

My main motivation for getting my RRSP over $60,000 is because firstly, the RRSP is the best investment vehicle for retirement, and secondly to reduce my income taxes. Lastly, I want my RRSP as large and robust as possible just in case I do opt to withdraw $25,000 for a house down-payment under the first-time homebuyer’s plan. With our goal to save up a $100,000 down-payment for on our first home, coming up with my half is much easier with the power of my RRSP behind it.

Over the next 11 months, these accounts will grow by:

  • monthly contributions
  • interest
  • dividends
  • capital gains

By the end of 2015, I’m hoping I will have gained enough ground in both the RRSP and TFSA to make maxing out these accounts easy in following year or two.

For those that are curious about the breakdown of my portfolio contents, I follow my own rules almost perfectly. That is to say I’m an avid index investor within both the TFSA and RRSP, but they’re balanced differently. Additionally, I hold common stocks of select companies in both, and as a general rule like to keep a handful of cash at all times. I do invest in unregistered accounts, which is to say I have savings and investments outside the TFSA and RRSP umbrellas, but these are kept at a minimum and usually earmarked for joint purchases, like the wedding.

Here’s hoping the stock market doesn’t screw up my plans this year!