RRSPs Don’t Deserve the Hate They Get Online

Dave and Brian Orlando on why paying tax later doesn’t make RRSPs a bad choice.

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People online are so negative, I find, on the RRSP. It really is crazy.

It is. This all started about 10 years ago, I would say, and it’s picked up momentum. And now you have some really smart people, like you Mark McGrath out there explaining, no, you’re, you’re off on this. And RRSPs aren’t perfect, but they’re still, for most people, very and walking people patiently through the math and they still get hammered.

People still go in the comment section, say, you don’t know what they’re talking about. I have to go on there sometimes and say, actually they do know what they’re talking about. They’ve got this right. I don’t mean to be rude, but you don’t know what you’re talking about. But for the most part, people just have locked in now on, because I’m gonna pay tax eventually, I don’t like these things. And the TFSA, funnily enough, a great product. We all love the TFSA has made the RRSP look bad, even though it shouldn’t, because, and so that’s created some of this issue too. But I’m glad that young people like you are out there now trying to hit these themes and say that the RRSP can still add a lot of value to people’s lives.

Totally. And I, I think getting financial planning help and it is, it is kind of confusing like with LIRAs and pension plan. Like, there’s so many different plans out there. A lot of them do have different rules, depending on the provider and everything like that. But RRSPs, you really can kind of keep it simple, even under a do-it-yourself methodology of like just doing a basic meltdown strategy.

As soon as you retire in your low-income year, start pulling out as soon as possible, keeping it simple. If you want to start stuffing your TFSA, that’s a great strategy as well, especially with the estate planning side. But really you, you have so much time and when you think about the tax brackets too, what you can pull out just from 65 to 70 if you defer CPP and OAS, you’re pulling out almost 15k a year tax-free actually from the RRSP. It’s quite nice. There’s income splitting benefits if you have a spouse and everything. Like you have a pension tax credit as well. So, you know, the RRSP is very manageable as long as long as you have a little bit of a plan and strategy.