What’s your retirement vision?
By Brenda Spiering, Editor, BrighterLife.ca
The countdown to the 2012 Registered Retirement Savings Plan (RRSP) contribution deadline is on. The Canada Revenue Agency allows contributions for the previous year for up to 60 days after year-end.
That means the RRSP contribution deadline for 2012 is March 1, 2013. You have up until that date to contribute a percentage of your annual income for the previous year and deduct it from your 2012 taxable income.
But if you’re stressed because you haven’t made your contribution yet or confused because you’re not entirely sure of all the rules, help is at hand.
For a host of up-to-date information on everything you need to know from how much you need to save to where to stash your cash, check out:
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Brighter Life’s retirement savings tips and tools |
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I think RRSPs are good for some and others not so much.
RRSPs just defer taxes. This means your $200,000 may be worth only about $110,000 after CRA’s cut.
OAS clawbacks means you make too much money and CRA wants your money back.
The retirement game is really the Spending Game. How much money can you save before retirement and how can you pay less to CRA and sleep at night with markets going up and down. This means RRSPs are like a tool; they can be useful but are not the be-all and end-all. This is the same with TFSAs.
Sun Life has a calculator which is a sequence of returns:
http://www.sunware.ca/illustrations/sequence.aspx?isRecalc=N&selectedLanguage=en-CA
Poor returns at retirement means you will run out of money years sooner. Flat returns or near-zero returns don’t help much after inflation and taxes.
[...] What’s your retirement vision? @ BrighterLife.ca [...]
RRSP’s are only good if you are in a higher tax bracket than you expect to be in when you retire and do not have a a decent work place pension. Know your tax rates and do the math to figure out whether RRSP’s will benefit you. TFSA’s are probably a better way to go for most and especially for any who have non-registered money making money out there, unless you use margin accounts, as i believe margin does not work in a TFSA. A combination of the 2 probably makes sense for the bulk of individuals out there. Keep tax advantaged things outside, and shelter the rest. READ, READ, READ and understand personal finance, its in your own personal best interest. The best time to invest is now (meaning the earlier you get started, the more chance of having it grow – compounding really does work). Cheers.
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