Right now in Ottawa every financial institution is advertising about how you should make sure that your RRSPs are max’ed out and how they are the right folks to talk to about them. I don’t really have any problems with these institutions, although anything done in haste I always worry about the consequences (i.e. make sure the money you are using for your RRSP contributions might not better be used to take on your debt load).
I guess the bigger question I have is, which is better to invest in (and this one is not an easy cut and dry question, because it involves future intangibles):
- First, this is not a question it is a comment. If you have max’ed out your RRSP contributions, have little or no debt and are putting money away for your kids education (i.e. RESP) good for you! And do you want to adopt my kids or me? 🙂
- If you have not max’ed out your RRSP, and you have debt load, and you have kids who will be going to a post-secondary institution, where do you put your money? This is the position I am in right now.
- I have a mortgage
- I have four kids
- I have some RRSP room still (not a lot, but some)
- The big question I guess would be do you max out your RRSP, or do you pay down your debt?
Lots of sites have discussed how it is important to do BOTH, I think I am of different minds on this.
If I pay my debt down, I can put money away later, AND I am more insulated from the dangers of layoffs, or some other catastrophic life event. If I put money in an RRSP as well as pay debt, I have money put away for a “rainy day” but I still have debt. Which is better? Not sure really, BUT MAKE A PLAN, is my only advice, and STICK TO IT!!!