Retirement is something that many forget or wait too late to plan for. Should we be afforded the privilege to reach retirement age, we would love to get there financially comfortable. What does this mean?  Our retirement portfolio should include income vehicles that provide for us during that time without having to rely on government assistance.

To accomplish the above, we are putting things in place now using the following methods:
▪︎RRSPs – Registered Retirement Savings Plan
▪︎Mutual funds
▪︎Premiere plan – a savings/investment account at our credit union

Today, we will share what we know about RRSPs:

RRSPs (Advantages)
– Most start with a minimum of $100 which isn’t bad
– Interest rates are usually decent (ours has a guaranteed 5%)
– Maturity dates between 55-65
– $25,000 tax free withdrawal to assist with 1st time home purchase 
– The exorbitant penalties for withdrawing prematurely can act as a deterrent 

RRSPs (Disadvantages)
– The 25% withholding tax fee for withdrawals before the maturity date is STEEP OMG!
– At maturity there is no way to just withdraw the entire balance tax-free. The maturity options are 1) take 25% tax-free and transfer the remaining 75% to an annuity 2)transfer 100% to an annuity 3)take 25% tax-free and pay 25% taxes on the remaining 75% to get all one time.

We have taken all of the above into consideration and decided to still use this option. The pros outweigh the cons for us and we believe that diversifying our portfolio is necessary. Can’t have all our eggs in one basket. 

Given the stats regarding RRSPs are you 😁 or 😒?

We’ll discuss mutual funds and premiere plans in an upcoming post.

Our Retirement & Investment Portfolio

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