RRSP season: Tackling the excuses and myths
We’re right in the thick of RRSP season.
As you likely know, the 2015 deadline for RRSP contributions arrives on March 2 — the last day to contribute, and earn yourself a handy deduction on your 2014 tax return.
Traditionally, only about a quarter of eligible Canadians contribute to an RRSP from year to year. I know there are some pretty handy excuses for those who don’t ante up — believe me, I’ve heard them all.
I’d like to take a couple of minutes to dispel some of those myths:
* I can’t afford to contribute: Of course you can. Look at it this way — in this case, time is the great enemy. By not saving now through RRSP contributions, you’ll need to save much more in the future to achieve the same level of financial security . . . and is it really going to be that much easier to contribute in a decade?
* I have my house: Many people consider full ownership of their house, after finally paying off that mortgage, as their retirement plan. But keep in mind that equity is merely a concept — and if you want to turn that concept into reality, you’ll need to sell your house, which is easier said than done for many reasons.
* I’ll rely on CPP and OAS: How far will $1,000 a month get you? Because that’s about what the Canada Pension Plan, and Old Age Security, are worth to the average Canadian once retirement arrives.
* I’ll have to pay tax on RRSP withdrawals once I retire: That’s true, but keep in mind that you’ll probably be in a lower tax bracket when you start withdrawing that RRSP money — and you’re getting the tax break now, to boot.
And what about the most widespread excuse — that you don’t have the knowledge the make the right RRSP investment?
That’s why you’ve got a focused and dedicated financial advisor like me. Book an appointment with me, give me a ring at 403.457.4142, or send me an e-mail so we can follow up with a discussion about your goals, your situation, and your financial future.