My Personal Savings Strategy for 2025

As a tax preparer I live in the world of money. That also means I do some things a little differently than others because I want to save on my taxes and get ahead financially.

Here is my personal savings and investing plan for 2025.

Phase 1

First, I'm holding off on buying a home until I can max out my First Home Savings Account (FHSA). The FHSA was introduced in 2023 and you're able to contribute $8,000/year for a lifetime maximum of $40,000. So if you max out your FHSA each year you'll only be able to contribute for 5 years.

I focus on maxing out my FHSA first. The reason I choose to max this account first is because any unused contribution room only carries forward to the next year and then it's gone. With the RRSP and TFSA, any unused contribution room carries forward year after year and does not expire.

This is my FAVORITE registered account because it's the only account in Canada that is 100% tax free. It combines the benefits of an RRSP, with the dollar for dollar deduction, with the benefits of a TFSA for 100% tax free withdrawals. You can learn more about it HERE.

Since I started contributing in 2023 this account will be maxed out in 2027. Unless something major happens I won't buy my first home until 2027 to take advantage of this amazing 100% tax free account.

If I choose not to buy a home I can roll this money over into my RRSP without affecting my RRSP contribution room. That means I essentially get an extra $8,000 of contribution room (aka tax deduction) each year I contribute with absolutely no downsides.

Phase 2

Once I've saved $8,000 in my FHSA I move on to my RRSP because I want to get the tax deduction. Your RRSP room grows by 18% of your earned income each year. That means if your salary was $100,000 you would get $18,000 of contribution room in your RRSP to use the following year.

Maxing out my RRSP each year is my goal but it can be challenging since that limit is higher than the set $8,000 limit for the FHSA.

Phase 3

If I was able to max out my RRSP I would then move on to max my TFSA. This account grows by a set amount each year and the amount for 2025 is $7,000.

Phase 4

If I was able to max out all 3 of my registered accounts I would then begin investing in the open market.

Modifications

The only change I would make would be if I wanted to contribute to my RRSP before the March 3rd deadline to increase my tax deduction and decrease my tax payable.

If that was the case I would find out what my current tax situation looked like before contributing and run different RRSP scenarios to see what the return would be if I contributed different amounts.

For example, if I had a balance owing I may choose to contribute to my RRSP to reduce that balance owing, or if I was just over the tax bracket I may choose to contribute to my RRSP to drop me down into a lower tax bracket.

In that case, I would contribute the amount I calculated to my RRSP first before March 3rd and then max my FHSA and continue my plan.

Complimentary RRSP Scenario Calculations

From January 1st to February 15th I offer complimentary RRSP scenario calculations for my clients. Even if you do not have your tax slips yet I can use your last pay stubs to do a mock return and then run different RRSP calculations for you.

After I complete my calculations I send an email with a full breakdown of my findings to you. This will allow you to make an educated decision if you want to contribute to your RRSP before the deadline and if so, how much.

For more information about this please email me or fill out the the contact form at the bottom of the page. To start this process book a Zoom call with me. Go to the booking calendar and select Personal Tax Filing.

It's important to note that I am not a financial advisor and this is not financial advice. This is my personal savings strategy. It's important to meet with a Certified Financial Planner (CFP) to discuss your specific situation and your goals.