RRSP Strategies

RRSP Strategies

Mortgage brokers weigh in on key RRSP strategies

RRSP season is here and at this time of year, Canadians grapple with issues about finding money to contribute, deciding what to invest in, and determining whether to forfeit the RRSP contribution in lieu of the ‘saving for a house fund’. We offer the following suggestions:

Short on money? Consider your home equity to maximize your RRSP contribution.
Higher real estate values may offer a chance for many to maximize their RRSP contributions by tapping into existing home equity. Of the almost $526 billion in RRSP room available to Canadians in 2006, only $74 billion was actually used, according to Statistics Canada. With a home equity line of credit, a homeowner can withdraw funds at relatively low interest rates on an as needed basis for the purpose of increasing RRSP contributions, including unused contributions from previous years.

Planning to buy a home in 2007? Make a contribution to your RRSP.
Contribute to your RRSP then use up to $20,000 ($40,000 per couple) of your plan’s accumulated assets to purchase or build a home. Under the Home Buyers’ Plan (HBP), the Canada Revenue Agency lets first time homebuyers access their retirement savings without tax consequences. Funds in your RRSP from previous years may be accessed right away. Contributions made to your RRSP by March 1, 2007 can be withdrawn after a period of 90 days, and the resulting tax refund can be used towards a down payment.

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