The Effect Of Income Levels On The Investment Choices Between Rrsp And Tfsa

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4.3 Results for Objective #2 – Whether RRSP is better for high income earners Based on our data collected, we have compiled tables and graphs in order to visually represent our selected data and to test our hypothesis. Since our main objective of this research paper is to determine the effect of income levels on the investment choices between RRSP and TFSA, the sample from investors with both and neither plans were excluded when testing the hypothesis in order to isolate the variables that we wanted to test. Therefore only 79 participants would be considered when examining whether RRSP is better for high income investors. The investment options of these 79 participants were shown as Illustration 4.3.1 as below.…show more content…
After removing those sample we were left with 79 participants who either chose TFSA or RRSP for their retirement savings. For this test we used a significant level of 5%. With the degree of freedom of 77 and a 5% significance level we arrived at a t-value of -1.990 and 1.990. Since our calculated t-critical value of -1.019 does not fall into the rejection region of -1.990 and 1.990 we have concluded that we do not reject the null hypothesis, shown as Illustration 4.3.6 as below. Chapter 5 – Major Findings and Discussion The purpose of the survey was to determine whether there is a relationship between investors’ income level and their investment options of RRSP and TFSA. Our literature review suggested that investors with higher income would be more favourable when choosing RRSP rather than TFSA. The null hypothesis was structured assuming there is no relationship between the income level and the investment choices between RRSP and TFSA. Based on the t-test we conducted using SPSS, we do not reject the null hypothesis (H0), which suggests that with a significance level of 5% we cannot conclude that the investors that chose RRSP had a higher income than the investors who chose TFSA. Therefore, the test result turned out to be different from what we have concluded from the literature review. As we discussed based on the secondary research,

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