How to maximize RRSP contribution room | Page 4 | RRSPs and RRIFs | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

No permission to create posts
sp_Feed Topic RSS sp_TopicIcon
How to maximize RRSP contribution room
April 21, 2020
11:53 am
Loonie
Member
Members
Forum Posts: 9232
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

I'll just say that "the math" is only part of the story. The assumptions behind the construction of the math question are where the big issues arise.
I discussed this in an earlier controversy with Norman, and Kidd has added other info.

It's actually the high rollers in corporate executive suites that have the best pension plans. They make sure they are very well looked after.

April 21, 2020
4:25 pm
Bill
Member
Members
Forum Posts: 3903
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

Very important to remember that corporate suite executive pensions are drop in the bucket vs millions of public sector pensions (including generous public sector executive, bureaucrat and politician pensions). In addition, the former are paid out of corporate profits (and if you don't like a corporation's pension set up don't do business with it, zero cost to you), for the latter taxpayers have no choice but to partly fund. Very important to distinguish.

April 22, 2020
3:47 am
Loonie
Member
Members
Forum Posts: 9232
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

Very important to remember that those enormous corporate pensions are in fact paid for by US because we are the end-point of whatever their business is. There is no such thing as a small producer of toilet paper, to take a current hot commodity.

Very funny idea to imagine that anyone could avoid patronizing large corporations! if you think that's possible, then you're not as smart as I thought you were.

I'm glad that at least some people who work hard in this crazy country have decent pensions. Everybody should have them.

April 22, 2020
6:37 am
Bill
Member
Members
Forum Posts: 3903
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

Incorrect. In fact there are small producers of toilet paper, check your health food stores or online for example. Lots of people are locavores, etc, they do their buying from small, local businesses and forgo the rest pretty much, it's what people of conviction do, ask them for tips. Do all your banking at a credit union, and so on. Inaccurate writing to say we need to patronize large corporations. And for those few purchases that are absolutely necessary, pennies go to their executive pensions compared to our taxes re public sector pensions - it's false to suggest otherwise.

My intelligence level and whether all people are entitled to generous pensions as a basic human right are irrelevancies here - I'll defer to you, Loonie, on those.

April 22, 2020
1:32 pm
cruzinalong
Ontario
Member
Members
Forum Posts: 223
Member Since:
April 15, 2020
sp_UserOfflineSmall Offline

promise said
I definitely would like to get a place in Toronto area given I work in the downtown area and I like your scenario but if I can get a better value in Oshawa or any other GTA I am also game. I need to do more research to see what's the rent value going in those areas and appreciation in comparison me getting a place in Toronto.

Another question I really need clarification on RRSP say if I had a year where I took a leave of absence and my income for that year falls below a low tax margin income year can I withdraw from my RRSP without any penalty before retirement and do I get taxed at lower tax margin of 33% or lower even though when I contributed to my RRSP it was at a higher tax margin of 43%?

do I have to pay it back similar to the home buyer plan if i withdraw it or i just loose the contribution room going forward. Do you guys use any strategy i briefly heard people saying to withdraw RRSP before the retirement age to avoid all the claw back you would get from the old age security etc, any advice on this would great.  

You can take money out of an RRSP ANYTIME you WANT. You do not need to pay it back. You pay a withholding tax. This can be claimed back on your income tax return the following spring. The amount you get back depends on your marginal rate. If you can live on 80% normal income less tax. My suggestion is take out in several smaller chunks to have less withholding. The first $5,000 is 10%. The next $10,000 is 20%. Over $15,000 is 30%. These values are reset if you take it out in different years. Say July-December and January-June. When you start working you get more contribution room in future years.

April 22, 2020
6:49 pm
Bill
Member
Members
Forum Posts: 3903
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

Just beware, once you take it out of the RRSP you can't put it back in (unless it's the first time home buyer's or lifelong learning situation), you would have to have more existing contribution room or else future earned income to create more contribution room first.

April 22, 2020
10:01 pm
Loonie
Member
Members
Forum Posts: 9232
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

No, Bill, it's not possible to live a life that doesn't include paying major corporations. Have you ever tracked the entire supply chains of everything your money goes to? Of course not. It would take years to do it and by then the info you started with would be out of date, but it doesn't take too long to run into a major corporation, even for the stuff you can buy at the health food store or farmers' market. And there is a lot more that we require than food and other consumables.

Just because you see an unfamiliar brand name somewhere, it doesn't mean that it represents a new company that started from scratch and avoided patronizing all existing major corps. And quite often they are just new brands of existing companies that perceive a new market niche for themselves.

I am well aware of the ethical alternatives and use them when suitable. That's why I know that it's functionally impossible to live outside of supporting major corporation - with rare exceptions such as homeless people, Old Order Mennonites etc.

Let's get back to the topic at hand, which was about RSP contributions.

No permission to create posts

Please write your comments in the forum.