You should save your RRSP contribution room until retirement if average income person….at 65 maximize your RRSP contributions so you get the full GIS and ends up being a 50-70 effective tax bracket…rinse and repeat until you use all your room…then with draw from RRSP later at 31-38% tax bracket
Good and insightful content. One thing to appreciate is that Dividend investements in any account are not set in stone. They are entirely flexible source of income and the mix of withdrawls can be managed as needed. If your investment style is to depend on dividend income ETF's and / or stocks - by all means invest in those. One thing that is not discussed in the video and one that should allways be at the back of your mind is to be aware of high cost Mutual Funds or the so called Star Fund Managers and their high fees. Invest in low cost index funds and educate yourself enough to do your own investments. Get advise to minimise taxes and fees whereever appropriate.
Ed, great to have rediscovered your channel - we talked ages ago when the Smith Manoeuvre was the "hot thing". If I'm leaving Canada in a couple of years should I max my RRSP out then melt it down, or just keep things as is? Have low six figures of available room (and the ability to deposit from an unregistered account) but won't be able to use up the deductions before it's off to the beach.
I can't give you a defintie answer without knowing your full situation. The general answer, though, is only contribute the amount that you can deduct. Normally, it is only wothwhile deducting RRSP in the 30% or higher tax bracket, but if you are planning to leave Canada permanently can withdraw as a non-resident bit-by-bit, then it's likely wothwhile also deducting at the lowest 20% tax bracket. As a non-resident, the lowest tax in most cases is to not file a Canadian tax return and only pay 15% withholding tax. If that is what you will do, then deducting now even at 20% allows you to invest and withdraw in the future at 15%. If you are doing the Smith Manoeuvre and have signficant deductions, it might be beneficial to file a Canadian tax return anyway, so you can claim the interest deduction. YOu might pay less tax than the 15%.
Finally some who puts down the examples, thanks, very informative
Amazing! Thank you Ed.
Great video!
Another great video!
You should save your RRSP contribution room until retirement if average income person….at 65 maximize your RRSP contributions so you get the full GIS and ends up being a 50-70 effective tax bracket…rinse and repeat until you use all your room…then with draw from RRSP later at 31-38% tax bracket
Good and insightful content. One thing to appreciate is that Dividend investements in any account are not set in stone. They are entirely flexible source of income and the mix of withdrawls can be managed as needed. If your investment style is to depend on dividend income ETF's and / or stocks - by all means invest in those. One thing that is not discussed in the video and one that should allways be at the back of your mind is to be aware of high cost Mutual Funds or the so called Star Fund Managers and their high fees. Invest in low cost index funds and educate yourself enough to do your own investments. Get advise to minimise taxes and fees whereever appropriate.
Ed, great to have rediscovered your channel - we talked ages ago when the Smith Manoeuvre was the "hot thing". If I'm leaving Canada in a couple of years should I max my RRSP out then melt it down, or just keep things as is? Have low six figures of available room (and the ability to deposit from an unregistered account) but won't be able to use up the deductions before it's off to the beach.
I can't give you a defintie answer without knowing your full situation. The general answer, though, is only contribute the amount that you can deduct. Normally, it is only wothwhile deducting RRSP in the 30% or higher tax bracket, but if you are planning to leave Canada permanently can withdraw as a non-resident bit-by-bit, then it's likely wothwhile also deducting at the lowest 20% tax bracket. As a non-resident, the lowest tax in most cases is to not file a Canadian tax return and only pay 15% withholding tax. If that is what you will do, then deducting now even at 20% allows you to invest and withdraw in the future at 15%.
If you are doing the Smith Manoeuvre and have signficant deductions, it might be beneficial to file a Canadian tax return anyway, so you can claim the interest deduction. YOu might pay less tax than the 15%.
@@EdRempel Thanks Ed, you've still got it!