Quote:
Originally Posted by GP_Matt
Is there ever a case where it no longer makes financial sense to continue contributing to your RRSP?
Let's say by the time you are thirty you have contributed the max for 12 years and bought some risky investments that paid off incredibly well leaving you with a million dollars in your RRSP. Does it still make sense to keep maxing out your RRSP or is there any advantage to moving your contributions to cash accounts?
*ignoring arguments like cash flow or spending instead of saving.
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Well thats a difficult question to answer. Some people contribute to their RRSP specifically for the deferred tax aspect, so that would still be a reason. Personally I'm a big advocate of the TFSA and non-registered savings for a few reasons. It all comes down to what you would like to do when you retire, or get close to retirement. If you want to spend a lump sum of money then though you are going to want to have this as non-registered or TFSA money almost for sure. Even for income you can take money from these accounts for a longer period of time than the RRSP (all things being equal in terms of the amount of income required and the value of the accounts to begin with).
There are still some arguments for the RRSP at that point, but I would lean towards other savings.