RSP Savers – Think Outside The Box!
In an article published on April 22, 2003, author Richard Shillington of the C.D. Howe Institute says "RRSP savers victims of bad advice". RRSPs are a terrible investment for many Canadians... because most of the proceeds will be lost to taxes and claw-backs. Shillington calls the situation "perverse" and urges financial advisors to stop spreading the myth that RRSPs are good for everyone.
Using 2001 information from Statistics Canada, Shillington found that GIS recipients have a total of about $12 billion in RRSPs, $5 billion in RRIFs, and $20 billion in private pensions. "After the GIS claw back and income taxes, many of these individuals receive at most 29% of their retirement funds." (That means that 71 cents of every dollar is going to the government!)
Withdrawals from RRSPs are treated as income in determining eligibility for GIS benefits. "The primary beneficiary of these savings will be the federal and provincial governments because most of the income will be confiscated by income-tested programs and income taxes," Shillington says.
"Clearly, many Canadians – especially those with lower incomes – are making sacrifices to save in RRSPs, although better advice would have them save elsewhere" Shillington adds. "Sadly, no one seems to have much interest in informing these people of the futility of their savings."
Well, Mr. Shillington is not completely correct in his final assertion. We, too, have long felt that RRSP savers are victims of bad advice! This is not to say we do not believe in RSPs. Not so. However, RSPs are only a part of a complete financial plan. They are a very worthwhile and invaluable investment. However, for some – indeed many - their part of the overall plan has diminished. Darren Weber Financial has developed a series of solutions to RSPs complete with the same tax deductible benefit of RSPs, but much better, and has been promoting these solutions for going on 15 years now. Check out the many articles in the Consumer Resources section.
While our solutions can certainly be considered an aggressive strategy, they are by no means illegal, illicit, shady, or underhanded. They are, in fact, time-tested and fully government sanctioned solutions. If your financial advisor hasn’t at least suggested you seriously consider these strategies, it’s time to call us to find the Financial Planning Solutions That Fit! You have nothing to lose and everything to gain.
Disclaimer
Darren Weber and Berkshire Investment Group Inc. and/or Berkshire Insurance Brokerage Inc. (Berkshire) do not make any representation that the information in any linked site is accurate and will not accept any responsibility or liability for any inaccuracies in the information not maintained by them, such as linked sites. Any opinion or advice expressed in a linked site should not be construed as the opinion or advice of Darren Weber or Berkshire. The information in this communication is subject to change without notice.
