RRSP Recap: Week of February 23rd


For the next few weeks I’m trading in -25 degrees for +25 degrees so I’m posting a couple of retrospective columns to keep you warm. The first is an RRSP recap to provide you with answers to any last minute questions as the season for silly surveys and mad last minute dashes to the bank draws to a close.

Some of the retirement savings columns I wrote this year are How much of your savings can you tax shelter?, What’s the RRSP Lifelong Learning Plan (LLP)?, How much should you save for retirement?, How your RRSP can help you buy a home, Give your RRSP contributions a raise and Why locking in doesn’t make sense.

Here are other interesting columns and articles by some of my favourite personal finance writers.

Jim Yih at Retire Happy has been writing about retirement savings for a long time. Take a look at his 2014 Online RRSP Guide: Helping your with RRSPs. There are links to blogs discussing just about everything you always wanted to know about RRSPs and were afraid to ask.

RRSP deadline and contribution limits 2014/2015 by Frugal Trader on Million Dollar Journey is a reminder that your RRSP contribution limit should be on last year’s Notice of Assessment (NOA) or 18% of your last year’s earned income up to a maximum contribution of $24,270 (for the 2014 tax year).

With the government hinting it will double contribution room, everyone’s talking TFSAs. But the good old RRSP is still a better choice for most of us, says David Hodge in The RRSP Advantage on MoneySense.

Is it time to hire a pro to manage your RRSPs? Diane Malley at the Globe and Mail says if your family RRSP assets exceed $1 million, maybe you’re ready for the top tier of the investment advisory business known as discretionary portfolio managers because they buy and sell securities at their discretion on behalf of wealthy individuals.

If you are a first-time home buyer, the Registered Retirement Savings Plan Home Buyers’ Plan (RRSP HBP) can help you come up with the down payment. But Adam Mayers at the Toronto Star questions whether tapping your RRSP to buy a first home is a good idea.

In a similar vein, if you are still paying off credit card bills you racked up in December, Caroline Battista at the Huffington Post gives Three Reasons You Shouldn’t Rob Your RRSP to Pay Your Holiday Bills. She says the impact on your retirement plan as well as your current tax situation goes far beyond any near-term benefit.

Dave Dineen on Brighter Life also explores the pros and cons of raiding your RRSP and some danger signs that you’re about to raid your RRSP for the wrong reasons. But if you are phasing into retirement he says withdrawing a lump sum to supplement your reduced income may make sense.

Contributing to your RRSP is only the first step. How you invest your money can have a huge impact on how much you have to spend when you retire. Larry MacDonald at Canadian Business offers 7 suggestions for investing RRSP contributions including avoid high-flyers and don’t chase what’s hot.

Taking enough risk in your TFSA should also be an important consideration when you are saving for retirement says Caroline Cakebread on Masters of Money. Seven years after TFSAs became available, she says its time to admit that TFSAs are outgrowing their label as a place to park money for a short-term goal. And as a result, it’s also time to rethink the kinds of investment we’re putting in them.

How saving for retirement beats paying down your mortgage from Rob Carrick at the Globe and Mail cites Jamie Golombeck’s new paper that finally gives the definitive question “Pay down your mortgage mortgage or contribute to your RRSP?”

And finally, Converting An RRSP To A RRIF: What You Need to Know by Marie Engen on Boomer and Echo is a useful primer on when you need to convert your RRSP into a RRIF, how much you will have to withdraw each year and how you can invest the funds in your RRIF account.

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