RRSP vs TFSA for Physicians
Strategic account selection by career stage
The Physician's Unique Situation
Physicians face a unique income trajectory - modest earnings during residency followed by significantly higher attending income. This pattern requires strategic tax planning about when to use each account type.
During residency (earning $60,000-$80,000), prioritizing TFSA contributions often makes more sense. Once attending income reaches $200,000+, maximizing RRSP contributions provides substantial tax savings. Coordinate this with your overall investment strategy and consider timing with incorporation decisions.
Strategy by Career Stage
Residency Years
Prioritize TFSA - lower tax bracket means smaller RRSP benefit, preserve room for higher-income years.
New Attending
Begin RRSP contributions aggressively - immediate tax savings at 45-53% marginal rates are substantial.
Both Accounts
Ideally maximize both TFSA ($7,000) and RRSP ($33,810) annually once established as attending.
Incorporation
Consider corporate investment accounts alongside personal RRSP/TFSA for additional tax-deferred growth.
Tax Savings Comparison
| Income Level | Marginal Rate | $10,000 RRSP Savings |
|---|---|---|
| Resident ($70,000) | ~30% | $3,000 |
| Early Attending ($250,000) | ~48% | $4,800 |
| Established ($400,000) | ~53% | $5,300 |
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