Quote:
Originally Posted by 2kreative
If you are referring to a RIF meltdown. You should first consider if this individual is a leverage candidate? if he/she is in the lowest tax bracket that should tell you they are not. one of the keys to leverage is to reduce interest rate risk and by being in the highest tax bracket that makes an individual more suited for leverage. Perhaps your should review the section on leverage to better understand suitability before suggesting that as a strategy.
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More suitable, yes, yet not unsuitable. The meltdown occurs during retirement - if you're still in the higher tax brackets you have not wisely planned your retirement to avoid taxation and are going to be hit on RRSP withdrawals anyways.
Quote:
Originally Posted by 2kreative
Here is a great calculator, it even takes into account your idea of the future value of the tax return by discounting the TFSA contribution after taxes.
http://www.retirementadvisor.ca/reta...SubMenu=preRet
Finally your condescending know it all tone just makes you sound snide and cocky. |
For someone making $25-35K and contributing 10% of their salary, there is no difference between the RRSP and TFSA - after tax at the default rates. Raise the ROI to 7% and the RRSP wins, yet then you have to start planning when to stop contributing and switch over to a TFSA to avoid clawbacks of other benefits.
Yet if you can structure your RRSP withdrawals to be tax advantageous, there is potential for the RRSP to come out far ahead.
My attitude may be snide and cocky, cause I don't need to give blanket advice and then attach "I am a financial planner" to it to gain credibility. I let my advice speak for itself - you'd do well to do the same.