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  • RRSPs for someone who has a pension plan is NOT a good idea; these people should invest in a TFSA to the maximum possible AND use an independent advisor NOT a bank advisor. They should NOT invest all this money in ETFs, which only mimic the various indices and NEVER beat the index , because of their fees, even as small as they can be ; some of their investments should be in actively managed mutual funds which sometimes DO BEAT the index but sometimes do not; this way they play both sides of the coin and can achieve better overall results over time than if all of their investments were in ETFs

  • Ronald 

    You touched on it mildly but if you start young and invest in blue chip stocks and reinvest each year than with the power of compounding you could have a very large sum when you have to convert it to a RRIF. Say you were astute and had a million in the account than when the government made the first withdrawal from the account it would be close to $50,000.00 which would be classed as interest so it would be fully taxable. While the money is in the RRSP you cant touch it but you can invest it. Personally I like to be able to handle my money that I worked hard for. I have a small one and that is because I started in ’88 and was laid off in January of ’92 so after that it didn’t make any sense to invest in it because it would have been interest income but it has grown just the same. Better to invest in a TFSA or non registered account and have the joy of buying and selling or holding your own stocks and pay the tax as you go even if you complain about it once in a while. As you stated it is tax deferred and the tax has to be paid eventually. I have heard people say yes but look how much I saved all these years but when the time comes some wish they didn’t save so much. Everyone wants more money but they don’t want to pay the taxes.

    • TSI Research 

      Thanks, Ronald. It’s always good to hear the investing experiences of our readers. We still believe that RRSPs and TFSAs have a role to play in the investment strategies of most Canadians at various stages.

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