Windfalls2 min read · Updated October 21, 2026
Got a lump sum? What to do with $100,000 in Canada
A sensible order for a bonus, inheritance or sale in Canada: cushion, card debt, then TFSA, RRSP and FHSA, with a worked $100,000 example.
Pause first
Put the whole amount in an easy-access account for a few weeks. No decision is urgent, and grief or excitement is a poor time for big ones.
A sensible order
- Fill your cash cushion: three to six months of essential costs.
- Clear expensive debt. A 21% card costs more than most investments earn.
- Pay down cheaper debt if the rate is above what you can safely earn.
- Put the rest to work: TFSA first for flexibility, RRSP if your tax rate is high, FHSA if buying a first home.
A worked example
You receive $100,000 with $8,000 in cash and $4,000 of monthly essentials. Six months is $24,000, so the cushion needs $16,000. A $20,000 card at 21% is cleared, saving about $4,200 a year. The remaining $64,000 goes to the TFSA, RRSP or FHSA.
Check the tax
Canada has no inheritance tax, but the estate may owe tax before it passes to you, and income from the money is taxable. Bonuses are taxed as income. Check the Canada Revenue Agency rules for your case.
Common questions
Should I clear debt or invest first?
Clear debt that costs more than you can safely earn from investing, after keeping a cash cushion.
How big a cushion do I need?
Three to six months of essential costs.
Is a windfall taxed?
It depends on the type. Inheritance, a bonus and a house sale are treated differently. Check before spending.