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Email this11:23 pm
October 22, 2010
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Does anyone have any advice for getting loans to maximize unused RRSP contributions?
9:21 pm
It really depends how low of a rate you can get and weather or not RRSPs are for you. Remember - RRSPs are for tax deferral vehicle - they are not a "tax free" vehicle so make sure that putting money into your RRSPs is going to be the best case scenario for you to begin with. If your annual income is under $40,000, it may be a better idea to "save for retirement" through a TFSA.
It also depends on what type of investments you plan to put in the vehicle (stocks, bonds, mutual funds, GICs etc.). Your banker may provide you with a reasonable loan - financial advisors can usually get better rates through 3rd party organizations (i.e.: B2B Trust). I know my answer is very ambiguous - there are a lot of variables and it's best to sit down to either do some research (which I see you're doing) or work with professional on this. I hope this helps a bit - good luck.
11:31 pm
Because the loan is used to earn income that is sheltered from tax, the interest expense from the loan may not be deductible for tax purposes.
8:50 am
October 22, 2010
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I see a lot of talk here about how TFSAs are better than RRSPs, but you can only contribute $5000 a year to a TFSA. I have a TFSA, and I put in the maximum $5000 a year, but that's not for retirement. I don't have a pension plan, I need to save more than $5000 a year for retirement.
10:15 am
November 8, 2009
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remember that the RRSP only makes sense if you are making reasonably good income. You will pay tax on an RSP eventually. The idea is to use it to push your taxable income lower when you are earning in a high tax bracket. Then when you retire your income may drop allowing the RSP money to come out at a lower rate. Another poster on this site smartly pointed out that the RSP is a bit of a scam when you consider that tax rates may rise in the future causing more pain for your investment down the road. TFSA may be the snail that wins the race in the long run for less rich people. On the other hand if you,re bangin off good money then load up the RSP for sure!
6:36 pm
AH, comparing TFSAs and RRSPs are comparing apples to oranges. TFSAs can be used to save for retirement as well - it really depends on which tax bracket you are in, how much assets you already have, and how much longer you have until retirement. kilarney made a very good point - you never know what tax rates will be like when you retire - so it may be wise to use some of your TFSA room for retirement as well. RRSP/RRIF withdrawals/payments can also affect other factors such as OAS/GIS - talk to a qualified professional to plan for these things. You're doing the right thing by doing some research.
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