Making My Annual RRSP (Sorta like a 401K) Contribution..

[Gen]

Re: Making My Annual RRSP (Sorta like a 401K) Contribution..

fuss mistake. never ever put ALL of your funds into the stock market, even if you choose a diverse mix.

did you have money in the market prior to this year's allocation ?


<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Curmudgeon_Milo</div><div class="ubbcode-body">Well I took it and put it ALL into purchasing stocks. They keep saying that this thing is a cycle and what goes down must rise up. Let's hope they are right! </div></div>

[turtledude]

Re: Making My Annual RRSP (Sorta like a 401K) Contribution..

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Diabolical_Tanya</div><div class="ubbcode-body"> under you mattress </div></div>

...where it will become wutluss next year when inflation hits.
I say, spend it all on something you really want, as if there will be no tommorow!

[Nylah]

Re: Making My Annual RRSP (Sorta like a 401K) Contribution..


turtledude

bout just spend it all

Milo, why you put ALL of your funds on stocks? Whether you use a registered or a non-registered vehicle, you dont want to weight it all with one type of thing. That is never a good approach.

The issue with RRSPs is that although u get a break in the years that you contribute, the full amount upon withdrawal is 100% taxable and at a rate that will be more than likely higher than what you originally put the finds in at. (yes, bad sentence but I dont feel like fixing it).

you have vehicles like univerisal life policies that have that wrap an investment strategy inside a life policy (which offers a whole host of protection) that when structured properly will all the funds you pull out at retirement to be not taxed.

even investment loans where you can write off the interest each year and are subject to capital gains upon withdrawal instead of the 100% amount for RRSPs, are much better.

Again, gotta know what you are doing to get it right. But that is only my opinion.

[RichD]

Re: Making My Annual RRSP (Sorta like a 401K) Contribution..

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">The issue with RRSPs is that although u get a break in the years that you contribute, the full amount upon withdrawal is 100% taxable and at a rate that will be more than likely higher than what you originally put the finds in at.</div></div> but isnt the theory that by time you taking them out you income should be much lower?

[Diplomat]

Re: Making My Annual RRSP (Sorta like a 401K) Contribution..

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">The issue with RRSPs is that although u get a break in the years that you contribute, the full amount upon withdrawal is 100% taxable and at a rate that will be more than likely higher than what you originally put the finds in at.</div></div> but isnt the theory that by time you taking them out you income should be much lower? </div></div>
Yep; at least that's how I understand it. I'm gonna be sitting with my FA tomorrow and see what she tells me, but I'm leaning towards short term GICs.

[Nylah]

Re: Making My Annual RRSP (Sorta like a 401K) Contribution..


yeah that is the theory.....but it doesnt fully work like that.

Plus, I'd rather have my withdrawals subject to capital gains that to be fully taxable.

[RichD]

Re: Making My Annual RRSP (Sorta like a 401K) Contribution..

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Nylah</div><div class="ubbcode-body">
yeah that is the theory.....but it doesnt fully work like that.

Plus, I'd rather have my withdrawals subject to capital gains that to be fully taxable. </div></div> well the tax man is pay me now or pay me later

[Emperah]

Re: Making My Annual RRSP (Sorta like a 401K) Contribution..

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">The issue with RRSPs is that although u get a break in the years that you contribute, the full amount upon withdrawal is 100% taxable and at a rate that will be more than likely higher than what you originally put the finds in at.</div></div> but isnt the theory that by time you taking them out you income should be much lower? </div></div>

fi mi fadda wish him nevah went de rsp route aftah him retiyah.
De gov rips him off if him use it. Eedah way dem get it out of you. All dat talk bout when you retiya dat your income will be less so the gov won't tax you as much is pure fawt.

I membah de days when mi fadda wouldan tell mi ova an ova seh mi need fi get inna rsp, of course at dat time he was working and getting advice from a tax pro at a bank. Now dat him retiyah him tink different now.

[Nylah]

Re: Making My Annual RRSP (Sorta like a 401K) Contribution..

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Nylah</div><div class="ubbcode-body">
yeah that is the theory.....but it doesnt fully work like that.

Plus, I'd rather have my withdrawals subject to capital gains that to be fully taxable. </div></div> well the tax man is pay me now or pay me later </div></div>


then you completely missed what I said.

There are other strategies that either eliminate the taxes you pay once you pull out your funds at retirement. And in the worse case scenario why on earth would you want to pay the taxman more than you need to? Doesnt even make sense to think like that.

The point is it is better to keep your earnings in your pocket.

[Gen]

Re: Making My Annual RRSP (Sorta like a 401K) Contribution..

wha mek unnu cyan chat american cho.

what is a RRSP ? how it work ?

it sound-ish like a reverse roth with a few more facts missing

[RichD]

Re: Making My Annual RRSP (Sorta like a 401K) Contribution..

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Gen</div><div class="ubbcode-body">wha mek unnu cyan chat american cho.

what is a RRSP ? how it work ?

it sound-ish like a reverse roth with a few more facts missing </div></div> its a deferred tax saving plan....you can put in up to 18% of earned income (maximum contribution is $22,000 this year i think)

interest earned within the plan is tax free ...at age 71 (i think ) you have to convert it to a income plan and withdraw you are tax are the existing rate for you income level at time of withdrawl.

[RichD]

Re: Making My Annual RRSP (Sorta like a 401K) Contribution..

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Nylah</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Nylah</div><div class="ubbcode-body">
yeah that is the theory.....but it doesnt fully work like that.

Plus, I'd rather have my withdrawals subject to capital gains that to be fully taxable. </div></div> well the tax man is pay me now or pay me later </div></div>


then you completely missed what I said.

There are other strategies that either eliminate the taxes you pay once you pull out your funds at retirement. And in the worse case scenario why on earth would you want to pay the taxman more than you need to? Doesnt even make sense to think like that.

The point is it is better to keep your earnings in your pocket. </div></div> and there are no strategies to eliminate/reduce withdrawals from RIFS?

[halfwaytree]

Re: Making My Annual RRSP (Sorta like a 401K) Contribution..

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Gen</div><div class="ubbcode-body">wha mek unnu cyan chat american cho.

what is a RRSP ? how it work ?

it sound-ish like a reverse roth with a few more facts missing </div></div>

Gen I'm not an expert but I will tell you what I know.

Every year, sometime before the end of February deadline, we Canadians can make a contribution to our RRSPs (Registered Retirement Savings Plans). There are a few options in where your contributions can go. They can go into purchasing GICs which provide guaranteed income, you can purchase a wide array of mutual funds as well. Some mutual funds are very conservative, such as income funds or money market funds while others are very aggressive (risky) which are heavily invested in the stock market. Some are invested in mortgage holdings etc... .

Why contribute to an RRSP? Well if I contribute say $10,000 before the February 28th deadline, I can use that $10,000 as a tax deduction against my 2008 earnings, meaning I will not pay tax on $10,000 of my earnings for 2008. So I can expect to receive an extra two or three thousand dollars back on my income tax refund come the spring. That's money in my pocket today. However, tax has to be paid on that $10,000 when I take it out one day (hopefully when I retire). At such time my income will be less than it is now so the idea is that the tax I pay on that $10,000 will be less than the tax I would have paid on it now.

So ends RRSP 101. At least that is my understanding.

[RichD]

Re: Making My Annual RRSP (Sorta like a 401K) Contribution..

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: dahJahPawtTwo</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">The issue with RRSPs is that although u get a break in the years that you contribute, the full amount upon withdrawal is 100% taxable and at a rate that will be more than likely higher than what you originally put the finds in at.</div></div> but isnt the theory that by time you taking them out you income should be much lower? </div></div>

fi mi fadda wish him nevah went de rsp route aftah him retiyah.
De gov rips him off if him use it. Eedah way dem get it out of you. All dat talk bout when you retiya dat your income will be less so the gov won't tax you as much is pure fawt.

I membah de days when mi fadda wouldan tell mi ova an ova seh mi need fi get inna rsp, of course at dat time he was working and getting advice from a tax pro at a bank. Now dat him retiyah him tink different now. </div></div> is di big pension hurt him

[X]

Re: Making My Annual RRSP (Sorta like a 401K) Contribution..

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Nylah</div><div class="ubbcode-body">

Sorry, dont believe in RRSPs and took all of my money out of them many years ago.

what to possibly invest in depends on lots of things too. </div></div>

Finally! Someone with sense.
Mi been having this debate wid people from mi move to this country.
RRSP is a way to get money from lazy minded people.
Can find much better ways to invest money (especially nowaday) than to puddun money whey yuh can only &quot;benefit from&quot; when yuh reach a age whey yuh deh crap thru a tube connected to a plastic bag.

The only reason mi contribute to RRSP is to get the company's matching portion.

Mi need someone to show me somone who benefited greatly from RRSP contribution vs having invested dem money into say a business.