No one likes debt - but Canadians are carrying a lot of it. That’s one reason some experts say no one should contribute to an RRSP until they have paid off all their debts - including their mortgage. Other reasons can include:

• You have credit card debt or other high interest debt. When you pay off a credit card that charges 25 per cent interest, your return is 25 per cent. Guaranteed. No other investment can give you that kind of pay-back. And in most cases, you don’t pay any fees to pay off debt. You will always have some costs when you invest, even in an RRSP. Learn more now about reducing your credit card debt

• You are worried you may lose money or not make enough when you invest. In a long-term bear market, many investments show lower returns or losses. In a highly unstable (volatile) market, anything can happen. On the other hand, when you pay down debt, you know exactly how much you will gain. It’s measured in the interest you save. For example, when you pay off a consumer loan at 6 per cent, your return is 6 per cent. To learn more about investment risk, watch this video now

• You have a low income and pay a lower rate of tax. Reducing your taxes today is an important plus for people who contribute to an RRSP. But if you have a low income, the tax savings will be smaller or even zero. That’s not all. Did you know your RRSP could even work against you after you retire? For example, any money you withdraw from a RRSP will be counted when you apply for the Old Age Supplement and Guaranteed Income Supplement. So you may do better paying off debt or saving outside an RRSP. Learn more now about taxes after you retire

• Your extra RRSP savings will push up your income tax after you retire. It’s not a bad thing to have more income after you retire. But it will mean you will pay more tax if the money comes from an RRSP. So if you think your tax rate will be the same or higher when you retire, a better choice for you today may be paying down debt or investing outside an RRSP. Learn more now about taxes after you retire

• Your RRSP savings are on track and you have a big mortgage. The experts don’t agree on this, but some suggest you may be better off paying down your mortgage. You’ll pay it off faster and then you can focus on your RRSP savings. You will have extra RRSP contribution room you can use later to top up your savings.

For example, let’s say you get a raise at work and can save an extra $500 a month. You owe $200,000 on a 15-year mortgage with a yearly interest rate of 5 per cent. The yearly tax rate on your income is 35 per cent. Would you be better off paying down your mortgage or saving in your RRSP?

The answer: unless you can make more than 5 per cent a year investing, you may be better off paying down your mortgage. Calculate your numbers now. Before you decide, remember that paying down debt first can reduce your retirement savings. You may want to discuss your choice with a qualified financial adviser first. This can include someone at your bank or lending institution.

Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.