RRSP's

Originally Posted by starbright

you can't get student loans if you have rrsp's.
so then when you finally graduate you're stuck w/ tons of debt AND you're behind in the saving game. sweet.

Nicole, if you are behind on the savings game, ask your bank about a high interest savings account that you are required to deposit into every month. It won't net you a tax break, but it shows you can and want to save money, and that helps when applying for credit in the future.

They aren't allowing you to take the RRSP's due to the tax break you are already getting being a full-time student!

[SEAN!]

Originally Posted by starbright

you can't get student loans if you have rrsp's.
so then when you finally graduate you're stuck w/ tons of debt AND you're behind in the saving game. sweet.

most students dont have any taxable income that make using rrsp's worth it.

[SEAN!]

Originally Posted by Leviathan

Returns on RRSP's are terrible, 4% or something the only reason I put into them at all is because of taxes and saving for a down payment on a house.

it depends on what you invest in, you can invest in any investment you want within an rrsp.
most people think rrsps are an asset class but they are not, they are simply a tax deffered savings plan. you dont pay tax on the money you invest in an rrsp, you dont pay taxes on any gains within the rrsp until you take the money out. the majority of the people on this board probably dont make enough money (especially after income tax deductions for school) to even be able to make sizable contributions to the rrsps without facing penalties the next year.

if you bought an exchange traded fund linked to the tsx 60 for your rrsp last year you wouldve seen a gain of around 22% even after fees.

[Leviathan]

^true enough, A couple of mine are actually in the TSE 60. I guess my argument was that being a young person I can afford more risk and control my own portfolio directly and make more money than an rrsp, provided I'm willing to spend the time researching the companies I invest in. :)

[SEAN!]

Originally Posted by R Wellbelove

I believe this is why my dad convinced me not too >>>


As soon as you take the money out you get taxed. Except when you retire and you can then cash in your RRSP's with out being taxed. So if your saving for a house... RRSP's are near usless. I think my dad said I may as well save for a down payment on a house in some other way that gives more intrest.
I know the regular CPP is shite, but with my benefets I also get a bonus CPP on top that the union is supose to double or somthing (yeah I should check)

Then again I could have this all wrong???

your dad is right, but you dont have to pay taxes on rrsps that are taken out to buy your first home, you do however have to pay that amount back within a few years, which may be extremely hard if not impossible to do.

the point of rrsps is to save money during the years in which you are taxed highest(like in your forties and fifties) and then use the accumulated savings when you are taxed lowest, such as when you retire. Right now you probably dont make enough in order to make a tax deffered plan worth while. thats not to say you shouldnt be saving, but you dont need an rrsp to save your money. In fact, because of the inflexibility of tax deffered plans and the short term uncertainty you may face whether buying a home, or paying for an accident its probably best you do not invest all that you save in an rrsp because if you want to take money out of it you're going to be hit with extra taxes and fees. Its better to keep a fair amount of your savings in non registered accounts with your bank or investment advisor, your bank or IA will then help you decide what type's of investments will be ebst to meet your risk profile and investment objectives.

if its to buy a place to live and you think youll be doing it within 2-4 years id go close to 100% cash and tresaury bills with no more then 25% exposure to equities. i have the same goals but since i dont give a fuck about risk im almost 100% equities.

[SEAN!]

Originally Posted by Leviathan

^true enough, A couple of mine are actually in the TSE 60. I guess my argument was that being a young person I can afford more risk and control my own portfolio directly and make more money than an rrsp, provided I'm willing to spend the time researching the companies I invest in. :)

if you have high risk tolerance and longer investment horizion why dont you just say fuck it and buy an etf which will follow the tsx exactly, youll end up paying ALOT less in fees and if you hold it for the long term with dividends reinvested (though im talking like 30 years) you'll will likely follow the historical trend of 9% returns per annum.

[Ree Fresh]

Originally Posted by SEAN!

your dad is right, but you dont have to pay taxes on rrsps that are taken out to buy your first home, you do however have to pay that amount back within a few years, which may be extremely hard if not impossible to do.

the point of rrsps is to save money during the years in which you are taxed highest(like in your forties and fifties) and then use the accumulated savings when you are taxed lowest, such as when you retire. Right now you probably dont make enough in order to make a tax deffered plan worth while. thats not to say you shouldnt be saving, but you dont need an rrsp to save your money. In fact, because of the inflexibility of tax deffered plans and the short term uncertainty you may face whether buying a home, or paying for an accident its probably best you do not invest all that you save in an rrsp because if you want to take money out of it you're going to be hit with extra taxes and fees. Its better to keep a fair amount of your savings in non registered accounts with your bank or investment advisor, your bank or IA will then help you decide what type's of investments will be ebst to meet your risk profile and investment objectives.

if its to buy a place to live and you think youll be doing it within 2-4 years id go close to 100% cash and tresaury bills with no more then 25% exposure to equities. i have the same goals but since i dont give a fuck about risk im almost 100% equities.

So what if I was to put in a bunch into rrsps for a few years than go full time into school and take them out then :p

It's a bit of a personal questions, but im just curiouse how much some of you have invested into rrsps?