Quote:
Originally Posted by LiquidTurbo
Hi,
Need advise on RRSPs, strategy, how much to contribute, how they work, etc. Correct me if I'm wrong but there's probably a bunch of people who don't know a lot about RRSPs.
Any help?
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The advice is different for each situation, you need to provide more info of where you're at and where you want to be.
Here's some general guidelines:
If you have a defined benefit pension plan (like most government employees) then RRSPs are probably not for you. Use your TFSA.
If you make less than $50K, then TFSA is probably a better bet. If you search for TFSA vs RRSP you'll find lots of material showing how at lower incomes the tax return now doesn't help as much as no tax on withdrawal.
If you make more than $50K, then RRSP.
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As for how much to contribute, you'll need to decide when you want to retire, how much savings you have now, and how much you want to retire on. I want to retire 50% of my salary, and I know CPP/OAS will provide ~30% of that. So I need to save enough to provide 35% of my salary starting at 65yo.
There are different ways to reach that target. I could have saved a percentage of my salary each year for the rest of my life. Instead I decided that trying to save while having a family would be difficult, so I wanted to have enough in my RRSP by age 30 and set a goal when I was 25yo. I'm 33yo now and have surpassed my goal, yet recently lowered my expectations of growth from 7% to 6% cause the markets suck, so I've been maxing out my RRSP and have set a new goal.
So... back to my first question: where are you at and where do you want to be?
PM me if you have more questions, as I often forget to check this forum.