Its the big RRSP season once again and personally, I am not a fan of RRSP. I have 40k worth invested in RRSP and I can say that if I regret one thing in my life, its all that money that I invest inside RRSP.
I am not a fan of RRSP for many reasons. First of all, you never can plan what kind of shit will put itself on your way. When you invest inside a RRSP, you cannot benefit that money until you retired at an OLD age.
Investing in RRSP will provide an immediate tax benefit, but when you get old, and withdraw the money, you'll need to pay tax on that money + all gain made! Awful right? I think that all the money you can possibly save should go to pay down debt and inside a TFSA and after, a non-registered account.
I need money now, not when I will be old and grey.
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6 comments:
The benefit of the rrsp is tax free compounding. Also, the tax differential between current marginal tax rate and future mtr. You have a low income so rrsps don't make sense for you.
You can withdraw the money now, just pay back the tax you saved when you put the money in and it's done. Why complain about something you can change.
You have no idea what you will need when quote 'you are old and grey'. While I don't say that an RRSP is 100% the way to go, you cannot ignore it.
Do you have an employment pension plan outside of Canada pension? My guess is no.
Are you maxing our your TFSA every year? My understanding is No.
Short term investing for short term gain is really stupid. You invest in the future - not for the now.
Get rid of that chip on your shoulder - its weighing you down.
RRSP can finance a maternity leave for a self employed person. Help you buy a home (if you really wanted to take on that much debt!). Help you go back to school. And there's no US tax taken off of dividends within an RRSP. Misinformed again.
Anonymous is correct dividend girl and you know something...getting old comes sooner than one can ever imagine..that means me! how i wished i had saved more after i lost my husband. the rsp will save you money on your income tax too. you make interest tax free for many years at your age.
I think any investment strategy should involve maximizing your use of tax-free devices at your disposal. As far as I can tell, RRSPs are win-win. First, you defer your tax on what you put in. Secondly, you use your tax refund to fund next year's contribution. As long as you don't withdraw until you are in a lower tax bracket, you're laughing!
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