One of the most common forms of investments for the average person is RRSPs. By contributing to these each year they have some security in knowing they are saving towards their retirement. Although most know what these are they may have some misconceptions or inaccurate knowledge about them.
When To Contribute
Many individuals only think about their contributions when its that time of year to contribute before the deadline. However, contributions can be made throughout any time of the year prior to the deadline. Most experts suggest thinking about making contributions carefully. Instead of rushing into it because the deadline is drawing near.
Where To Open An RRSP
A good number of people assume that they can only open an RRSP at their Bank. Some put off doing this because it’s a hassle having to take the time out to do it. However an RRSP can be opened at any Bank, and it can also be done online through online investment services.
RRSPs Are Job Related
Another misconception is that RRSPs can only be gotten through places of employment. This is not true as again they can be got from any financial institution.
Transferring RRSPs
Another area of confusion is that once they open up a RRSP at one financial establishment that they cannot transfer it to another. This again is false. There is the option to transfer the RRSP and this can be done without paying taxes on it. But, what can happen is that the company you are using to transfer your RRSP may charge a fee for doing this.
Tax Purposes Only
The majority of people hate paying taxes. If they can get away without having to do so legally then they will take the opportunity. This is one of the major reasons why people opt into RRSPs. The long term benefits of the RRSP should not be overlooked. These can provide some additional income in the retirement years that will surely come in handy.
Looking At The Details
Small details like the fees are something that should not be overlooked. They may seem small on a yearly basis but over several years they mount up.
While RRSPs can be a wise investment individuals should also be sure to check out what other types of investments may be appropriate for them.
Knowing what to invest in. Many who are taking out RRSPs automatically go for the mutual funds. They may not realize that there are other options or they just feel safe with the mutual funds.
RRSPs can have tax implications. If you are in need of some tax filing assistance I would love to help. Just call me, Sam Seidman, at 416-398-1700.
