Just because you may have a pension, doesn’t mean you shouldn’t have an RRSP. You also should have a TFSA and your only financial goal should be to be out of debt by the time you retire.
If you have an emergency fund, do you have a plan on when you might use it? Simply having money sitting somewhere with no plan on when it should be used is really just a savings account.
An RRSP is simply a tax deferral savings program. It works best if you use it for your retirement, but that is the primary goal of it. You can’t use it like a TFSA, but it is not solely for your retirement.
The TFSA is a badly named program. It is Tax-Free, and you can save in it, but it is not only a savings account. Many banks are fooling you into thinking the program is a one savings account. It is not. Open a TFSA with a trading firm like Questrade, Directline or others.
Debt is simply borrowing money from your future self. I know it is not in vogue to say debt is a bad thing, but it is. Your first goal should be to deaden your debt load, the rest of the financial plan is gravy.
Totally agree that the TFSA name misleads people. Although for some reason RRSP also says saving but I guess the difference is plan vs account.
I try to put the maximum allowable in to my TFSA savings account every year. Hard to figure out the interest rate it pays me as its value was all over the place last year but it paid slightly over $600 AVG per month last year.
You get rates like that when you have little cash sitting there doing nothing. Find a way to invest it that you are comfortable with.
RICARDO
Unfortunately I retired with a fairly hefty bank loan.
Fortunately the interest is tax deductible, the dividends pay the interest and lower the principal every month.
RICARDO