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Does anyone ever dip into their RSPS
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| BTG |
I seem to be running a deficit lately, I always end up in the negatives before payday....is it a bad idea to pull a little money from RSPs to pay off some outstanding bills?
Maybe you have, share some experiences with the rest of us who might not be financially savvy. |
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| rabbitjoker |
Generally a bad idea.
Not only will you have to re-pay the taxes on the funds but you'll also pay a penalty. $10k of RSP money quickly turns into $5k after this haircut.
Worser yet - you lose the contribution room and the contribution's future growth. $10k could be $100k+++ when it comes time to retire.
Get on a budget, stick to it, figure out a way to make more money. These are better options IMO. |
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| jester |
I honestly don't know why people want to have RSPs. You put money in, to save you taxes now but later on you will get hit with taxes.
Thankfully there is TFSAs, if you didn't start yet 2012 you can put in a total of I think $20,000 and $5000 each year after. Plus you can make money off it and not worry about paying taxes. Thing is people dislike the idea, of making money and not paying taxes and they want the whole TFSA thing to be scrapped. All I can say, those people. Why is it my fault, that I want to have so many that the government can't touch. You already take 30% of it from income taxes and more from sales taxes. |
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| Nrg2Nfinit |
rrsps are great.. use up to 25 k to buy a house without tax penalties, plug money into it when you are earning alot to get taxed income back, take it out when you're old and retired and pay low marginal rates (whilst having it conitnually grow through investments while its in that account)..
if you are making less than 10k per year, i'm pretty sure you can withdraw that money without any tax penalty. |
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| BTG |
| lol who the hell makes less than 10k |
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| -g- |
| quote: | Originally posted by jester
I honestly don't know why people want to have RSPs. You put money in, to save you taxes now but later on you will get hit with taxes.
Thankfully there is TFSAs, if you didn't start yet 2012 you can put in a total of I think $20,000 and $5000 each year after. Plus you can make money off it and not worry about paying taxes. Thing is people dislike the idea, of making money and not paying taxes and they want the whole TFSA thing to be scrapped. All I can say, those people. Why is it my fault, that I want to have so many that the government can't touch. You already take 30% of it from income taxes and more from sales taxes. |
TFSA total contribution room is unlimited, notwithstanding the 5000/a max per year proviso.
| quote: | Originally posted by BTG
lol who the hell makes less than 10k |
anyone who has retired.
which is entirely the point of RSPs anyway. |
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| Billche |
| quote: | Originally posted by Nrg2Nfinit
rrsps are great.. use up to 25 k to buy a house without tax penalties, plug money into it when you are earning alot to get taxed income back, take it out when you're old and retired and pay low marginal rates (whilst having it conitnually grow through investments while its in that account)..
if you are making less than 10k per year, i'm pretty sure you can withdraw that money without any tax penalty. |
You can only use RRSP's on a first time house purchase. After that, there's no way to access them without getting hit by taxes or penalties.
Personally, I don't really like them, but if you invest in them religiously they aren't a bad investment. I'd rather invest in real estate itself, and flip/rent out properties. The only problem with that is, is that you'd typically need to be good with your money while saving up for a down payment, or have someone you trust that you can partner up with to put money down. |
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| Nrg2Nfinit |
| quote: | Originally posted by Billche
You can only use RRSP's on a first time house purchase. After that, there's no way to access them without getting hit by taxes or penalties.
Personally, I don't really like them, but if you invest in them religiously they aren't a bad investment. I'd rather invest in real estate itself, and flip/rent out properties. The only problem with that is, is that you'd typically need to be good with your money while saving up for a down payment, or have someone you trust that you can partner up with to put money down. |
the whole point of rrsps is to save money in them and when you retire, pull money out at a lower marginal tax rate. If you arent working and need to pull money out of them you will be taxed at the lowest marginal rate. |
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| -g- |
| quote: | Originally posted by Billche
You can only use RRSP's on a first time house purchase. After that, there's no way to access them without getting hit by taxes or penalties.
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that's not entirely true; you may also withdraw $ from your rsp if you register and qualify for the LLP(life long learning program). consult the cra for more details. |
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| Skipper |
| quote: | Originally posted by Billche
You can only use RRSP's on a first time house purchase. After that, there's no way to access them without getting hit by taxes or penalties.
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You can also use them to go back to school, as I did. |
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