Kevin just turned 18 years old on February 18, 2022, and received money from his parents, aunts, and uncles. In total he had $2,000 and wanted to invest it. He has always saved his money and started saving at the age of 15 when he started working at his fathers company, but until now, has only put it in his savings account. Kevin went to the Canada Revenue Agency (CRA) site under My Account after he filed his 2020 personal income tax return to confirm his contribution room for both a Registered Retirement Savings Plan (RRSP) and a Tax-Free Savings Account (TFSA). He however is in a dilemma to know which one to contribute to. He is going to his bank next week to open both accounts and will decide then. His total contribution will be the $2,000 from his birthday and his previous savings of $3,000 when working with his father during summers. He will invest the $5,000 and then withdraw it all on December 15, 2022, to buy a touring bike for his trip to Australia that he will be taking over the holidays. See Table C and D.

a) Based on the information above, which would be the recommended account for Kevin to contribute to with regards to either an RRSP or TFSA, and the reason? (.5 marks)

TABLE C

Tax-Free Savings Account (TFSA): Annual Limits
Years	Annual Limit	Years	Annual Limit
Year started 2009 - 2012	$5,000/year	2016 - 2018	$5,500/year
2013 - 2014	$5,500/year	2019 - 2022	$6,000/year
2015	$10,000/year	2023	$6,500/year (estimated)

TABLE D

Registered Retirement Savings Plan (RRSP): Annual Limits Formula for RRSP contribution limit: 18% of your previous year's earned income less your previous year's pension adjustment to an annual maximum.
Year	Annual maximum contribution limit
2020	$26,500
2020	$27,230
2021	$27,830
2022	29,210