Why I'm not a fan of RRSPs

By: Mark Frentz
www.akerahomes.com
mfrentz@akerahomes.com

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The Fundamental Problem

The Canadian government created registered savings plans in order to help people 'save in taxes now and pay less later'. The idea is that, while in your greatest money making years, you save money (because you are taxed in a high income bracket) and invest with it in order that later on in life when you retire you will be able to take out this money at a lower tax bracket. Do you see the problem?

The major problem with this help from the government is that it was developed for people who PLAN to live on less money in their retirement than they do now! I don't know about you, but I don't want to live on less in retirement. I want to maintain my standard of living later in life, not have to settle for less.

My Personal Plan

My plan is obviously different than that of those who, maybe unwittingly, choose to settle for a lot less in their retirement. I invest in real estate and receive tax benefits every year (the exact same concept of paying less now while investing) so my investments will pay me just as much if not more in the future. I have no problem paying high taxes later on in life if I am making more and don't have to work every day for that income. I use the money I save in taxes, now, to reinvest in real estate. This means I will actually have more investments for the future (again, similar to RRSPs).

Why settle for less later on in life? I get riled up when I think of how many families actually plan to take a dive in their standard of living! With just a little bit of knowledge and planning you can take control of your savings and invest in ways that will still pay less in taxes, but will take care of your future consistently better than those the media tends to preach.

I am planning to start a series of blogs on how to invest your RRSPs if you already have money in them. I DO NOT encourage individuals to pull all their money out of RRSPs if money is already in them. Always speak with a competent accountant before making these decisions for yourself. I am not attempting to take away from other advice. I simply desire to give you some ideas so you can take more control of the money you have worked so hard for.

If you would like to learn more about investing in real estate please contact me at the email address listed at the beginning of this article or go to my website at: www.akerahomes.com/investing-in-real-estate.html