A client approaches their advisor wishing to open a new investment account. They are a Canadian resident, 45 years old, employed full-time, and have accumulated a significant amount of savings. Their primary financial goal is long-term growth for retirement, with a secondary goal of potentially withdrawing funds in 10-15 years to help their child with post-secondary education. They also express a desire for tax-efficient growth. Which type of account would generally be most suitable for their primary goal, considering the Canadian tax environment?

Question: A client approaches their advisor wishing to open a new investment account. They are a Canadian resident, 45 years old, employed full-time, and have accumulated a significant amount of savings. Their primary financial goal is long-term growth for retirement, with a secondary goal of potentially withdrawing funds in 10-15 years to help their child with post-secondary education. They also express a desire for tax-efficient growth. Which type of account would generally be most suitable for their primary goal, considering the Canadian tax environment?

Answer options: ✅ Registered Retirement Savings Plan (RRSP)

• Tax-Free Savings Account (TFSA)
• Non-registered cash account
• Registered Education Savings Plan (RESP)

Correct answer: Registered Retirement Savings Plan (RRSP)

Explanation: For long-term growth towards retirement with a significant savings base, an RRSP allows for tax-deductible contributions and tax-deferred growth, which aligns well with their primary goal. While a TFSA offers tax-free growth and withdrawals, the contribution limits are lower than what may be needed for significant retirement savings, and an RESP is specifically for education savings with government grants, not the client's primary retirement goal.