Thread: RRSP Loan?
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Old 03-03-2016, 09:31 AM   #9
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Join Date: Dec 2006
Location: Calgary, Alberta

Originally Posted by GGG View Post
In your early years of earnings a TFSA might make more sense then an RRSP. If you are in a lower bracket of income then you think you would be in when you retire or you plan on using the money for a downpayment on a house you are better of paying the tax now and waiting until you are in a higher bracket to use your RRSP contribution room.

If you pull money out of your RRSP to buy a house you pay it back with after tax dollars of your 30-40 income instead of paying with after tax dollars of your 20-30 income.

Also you would have to run the numbers but I'm not sure perpetually taking RRSP loans and paying them off over the next 12 months is better or worse than skipping 1 year of contributions and just putting in money over the next 12 months. I think the banks make money with both hands here on the interest and on the fund sales.
There is no question that is the case, but there are options aside from the bank funds. You can get RRSP loans that aren't tied to the specific funds or a fund company and use the funds to invest in whatever you like in terms of securities.

As for the rest of your post, what it comes down to is that you have to do the math and see what makes the most sense. For some people that is purely the TFSA, whereas for others a combination or straight RRSP maximization is beneficial. There are a number of moving parts though.
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