Using the RRSP: A Guide for All Ages
Meet the Registered Retirement Savings Plan. Many know about it, some use it, but very few actually know how to optimize it.
Unlike popular belief, the RRSP is at least as useful during early adulthood than retirement. There are so many smart moves one can perform during his professional life that we must stop portraying it as some account where money hides until retirement.
As a matter of fact, there are two occasions at which one can take money out of his RRSP without penalty, as long as it is refunded over the next 10 or 16 years. One is for a full-time student to finance his post-secondary education, where he is allowed to withdraw up to 20 000$ over two years. The second is when buying a first house (or first house after 5 or more years of tenancy), where an individual can withdraw up to 25 000$.
Anyone in either of these situations could therefore contribute to his RRSP and withdraw the money at least 90 days later to keep both the contribution money and the tax return.
Implementing such strategies in a financial plan can work wonders, especially when eliminating debt, buying a house or launching a business! How does it apply to your situation? Please do not hesitate to contact us should you have any questions, concerns or desires. Till next time!