Canadian Personal Finance Blog

Archive for January 17th, 2008

It’s RRSP time.. you can almost make up a song about that (sung to the tune of “It’s Howdy Doody Time”, but I digress.

What are your plans for RRSP’s this year? I buy RRSP’s little by little over the year, so I don’t feel quite so “exposed” about not having done enough for my RRSP’s however, I think this year I am going to get a significant boost in my RRSP limit (due to my pension being capped). I keep thinking I’d like to dump a lot of money into that RRSP space, but then I wonder where that money is coming from?

The airwaves will be plastered with Scotiabank, TD, PC Financial, Sun Life and anybody else who can buy ad time for you to buy your RRSP now, while you still have time!

Interesting RRSP Comments and Questions

Over the past few weeks I have heard more discussion on this and here are some interesting comments and questions that I have heard about RRSPs and such:

• Should you buy RRSPs or pay down your debt? My theory is “Yes”, you should pay down your debt mostly, but still make some token RRSP savings. Killing debt is the first thing to do, always.
• Should you go into debt to buy RRSPs? I don’t like the idea of leverage to buy investments (we had this discussion with the N.C.F.B.A. and many of my fellow bloggers agree on this point). If you take a loan to buy your RRSP, make sure it can be paid back in less than 6 months, so it doesn’t get forgotten about.
• Should I put money away for my house down payment in my RRSP? I don’t know about that one. When I bought my first house there was the O.H.O.S.P. and that saved you your land transfer taxes. I If anyone wants to comment on that I am open to discussion.
• Which is more important an RRSP or an RESP? The answer is YES if you have kids. RESPs give you free money for your kids education, so you should think about that, but RRSP’s take money directly off your taxes so they are good too.
• Where should I invest my RRSP? That one you should know better than to ask me. Don’t put it in Mutual Funds, but also don’t put it in “sketchy” stocks either. Check N.C.F.B.A. blogs for ideas in that area.
• Should I make an RRSP payment or pay down my mortgage? Yes again! Do both. Put money in your RRSP and then take your tax refund and put THAT on your mortgage as an overpayment. That one I stole from Gordon Pape.
• Do you have RRSPs? Yes, but I still think I don’t have enough in them right now.
• What does RRSP actually mean?  Registered Retirement Savings Plan  (someone should create a Financial T.L.A. and F.L.A. glossary somewhere)
• Can I transfer funds into my RRSP from another RRSP? Yes, as long as the accounts are in your name, no problem, just fill in the right forms at the place you are transferring it TO you should be fine. You cannot transfer from your Spouse’s RRSP to your own (although I am not sure what happens if your Spouse passes on).

As I think of more questions I’ll post them. If you have questions comment away, I will attempt to find out the answers.