Quote:
Originally Posted by GP_Matt
Is there any maximum in your scenario. ie. at some point if you max out your RRSP's and invest wisely the income generated from your RRSP's can put you in the top tax bracket negating a lot of the savings from your tax breaks on the contribution side.
As an example, a person who maxes out their RRSP from 18 to 65 with an 8% return will have something in the range of $13 million in their RRSP. Once it is converted into an RRIF at 71 you are forced to withdrawal 7% or $900000 a year and pay a huge tax bill.
In that scenario, I think you would have been better off to put the money into a cash account to take advantage of the lower tax rate on dividends and capital gains.
The amount seems unrealistic, but I hear that a lot of the 1% hang out on this board.
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Depends on how your finances are.
The only reason, I can come close to maxing my RRSP every year is due to the tax refund from my previous year's contribution. I dump my tax return into my RRSP. With an TFSA, there's no such return.