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Abstract
"There's no magic formula for building a comfortable retirement nest egg. You have to assess your future needs, set realistic, attainable savings goals and start saving as soon as possible. More often than not, however, reaching your financial goals for retirement means maximizing your RRSP contribution. While a systematic savings plan should be your first choice, there can be many tax and financial advantages to taking out an RRSP loan," explained Daniel Laverdiere, Senior Manager, National Bank Financial Planning.
Ask your financial advisor to calculate how much you can expect to earn on your investment and compare it with the interest rate you would be paying on your RRSP loan. If the anticipated return is higher than the cost of borrowing, a loan could well be worthwhile. If not, then you will be losing more than you stand to gain. You are then better off investing little by little in an RRSP by opening a systematic savings plan and re-investing your tax refund.