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lowside67 · 04-02-2016, 07:06 AM

There is a scary amount of misinformation in this thread. RRSPs and TFSAs are powerful tools for minimizing your tax paid over the long run but particularly RRSPs require some strong planning as they are not particularly flexible and can be expensive to withdraw if you need them in an emergency. A financial planner at your bank or financial institution will review your plan and help you understand what you need for free or at a minimal cost and it's worth doing.

Simple things like when you get your first job out of university, it's tempting to start contributing to your RRSP right away to get a tax refund. However, in some fields, you are going to have a huge increase in pay over a few years, and in most of those cases, it makes sense to wait because your marginal tax rates will increase so quickly. Simply put, if you put $20,000 in RRSPs away right out of university, your tax rate might only be 30% so you get $6,000 back while if you wait a few years, it might be 40% and you'd get $8,000 back. Just an example, not actual advice to any one person's situation, but the point is having qualified help is worthwhile.

Mark (works at a bank but is not a financial planner)

04-02-2016, 07:06 AM	#44
lowside67 Old School RS Join Date: May 2004 Location: Port Moody Posts: 4,641 Thanked 4,157 Times in 1,262 Posts Failed 130 Times in 80 Posts	There is a scary amount of misinformation in this thread. RRSPs and TFSAs are powerful tools for minimizing your tax paid over the long run but particularly RRSPs require some strong planning as they are not particularly flexible and can be expensive to withdraw if you need them in an emergency. A financial planner at your bank or financial institution will review your plan and help you understand what you need for free or at a minimal cost and it's worth doing. Simple things like when you get your first job out of university, it's tempting to start contributing to your RRSP right away to get a tax refund. However, in some fields, you are going to have a huge increase in pay over a few years, and in most of those cases, it makes sense to wait because your marginal tax rates will increase so quickly. Simply put, if you put $20,000 in RRSPs away right out of university, your tax rate might only be 30% so you get $6,000 back while if you wait a few years, it might be 40% and you'd get $8,000 back. Just an example, not actual advice to any one person's situation, but the point is having qualified help is worthwhile. Mark (works at a bank but is not a financial planner) __________________ I'm old now - boring street cars and sweet race cars.