Google Canada has produced this list of the most common searches related to registered retirement savings plans over the past 10 years:
Kudos to everyone using the internet to get answers to basic questions like these. It means you’re actively engaged with your finances and taking steps to move forward. But that second-ranked search about RRSP withdrawals? Ouch.
Some statistics on early RRSP withdrawals were presented in a recent edition of Carrick on Money. Roughly one-third of people with RRSPs made early withdrawals, many of them to pay debts or cover emergency expenses. In a dire financial situation, you do what you have to survive. But is it possible people are too casual about taking money out of RRSPs?
The government allows you to withdraw money from RRSPs to buy a first home or return to school, but their main purpose is to provide funds for you to use in retirement to cover your spending needs. Withdrawing money from an RRSP now is taking money away from your future, retired self. Be very cautious about doing that.
As for those basic questions people are asking about RRSPs, try the Ontario Securities Commission’s GetSmarterAboutMoney.ca website for a good overview. Also try The Globe and Mail’s Retirement Centre – it includes a lot of RRSP coverage.
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Rob’s personal finance reading list…
Why your next splurge should be for a new bed
A well-argued case for splurging on things you use a lot rather than toys or one-time experiences. So a new bed, for example, rather than a cruise.
Avoiding ‘bored boomer’ syndrome
Tips to help prevent baby boomers heading into retirement from becoming “a casualty of an off-the-cliff leap from labor-to-leisure, vocation-to-vacation.”
How to cut your coffee costs
All about the latest in reusable-coffee-cup technology. Many coffee places will discount your purchase if you bring in a reusable cup, but the main benefit is producing less garbage. This is a U.S. article, but I have confirmed the cups talked about here are available in Canada.
Investment tips for Americans living in Canada
The focus here is on tax reporting, particularly with respect to tax-free savings accounts and registered education savings plans.
Today’s financial tool
A Globe and Mail guide to retirement: How to save smarter and not outlive your savings (for Globe Unlimited subscribers)
Q: I asked my financial advisor to purchase 520 shares of an ETF. When I got the purchase confirmations, it showed that three transactions of smaller amounts adding up to 520 shares had taken place, instead of a single transaction. Each transaction had a commission charged to me. Is this normal?
A: I asked someone in the brokerage business about this and he said that as long as the three trades happened on the same day, “it would be fair to be treated as one [trade] and with one commission.” There might be justification for multiple commissions if the trade was executed in parts over two days. This matter is worth taking to your broker for a full explanation of the charges and the firm’s policy on commissions. Try complaining – they may reimburse you for part of the cost.
Do you have a question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.
In case you missed these Globe and Mail personal finance-related stories
- This millennial’s horizons are clouded by debt. Should he declare bankruptcy?
- How a 30-year amortization would affect mortgage payments
- Here’s proof that you’re wasting your time trying to time the market (for Globe Unlimited subscribers)
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