Besides rainy days, February is also the peak time for everything RRSP related, from extended bank line-ups to mutual fund advertising. It’s also a good time to re-evaluate your investment goals, and whether you even need to rush to the bank for that RRSP loan. For many Canadians the TFSA is a much better investment choice. However even since its launch in 2009 the TFSA still remains as elusive as ever, and many Canadians still don’t understand the full benefits of the TFSA over the RRSP
RRSPs, TFSAs, and Retirement
My Own Advisor (not really my advisor) wrote a great post this week on the benefits of the TFSA over the RRSP, in If you spend that RRSP refund, then the TFSA makes more sense. One of his points in the article was to outline why it’s a bad idea for people to contribute to their RRSPs then spend their tax-refund. But he also made some great points for the TFSA.
MOA was also interviewed about his TFSA strategy by the Toronto Star, in Tax Free Savings Account power increasing. When it comes to the power of the TFSA, Mark and I have often conversed on the subject, and our views are very similar. We both feel the TFSA is the ideal investment plan for retirement. However many people still don’t seem to understand the full value and benefits of the TFSA.
Although it’s not published yet, be sure to check out my article on the benefits of the TFSA over the RRSP, coming up this Valentine’s Tuesday on BankNerd.ca. If you’re not familiar with BankNerd this is a high profile site that covers everything Canadian Banking related, and it gets noticed. I was accepted into their new Guest Authorship program – check the About page out. Thanks Bank Guru!
The whole point of investing in either a TFSA or RRSP of course is for retirement. But once you start withdrawing your retirement portfolio, how much should you withdraw? Robert Wasilewski (DIY Investor) discusses the classic 4% Rule in his Withdrawal Rate posts Part-1 and Part-2.
Other Posts Around the Web
Have you heard enough about TFSAs, RRSPs or retirement?
How about animals? Modest Money wrote a nice post on the priceless companionship of pets in Buying a Pet – Investing In Happiness. Although Jeremy is a new blogger on the scene, he’s getting a lot of attention already! (He even gets more comments than I do).
Vicky at Vix’s Finances ponders the TD e-series Index Funds in Part 3 of her Mutual Fund series. She asks if it makes more sense to buy the e-series funds instead of ETFs. For the majority of investors, the answer is probably – yes! Though I suggested in her comments, you don’t need a TD Waterhouse Account to buy them. It’s cheaper and easier to buy them through a TD Mutual Funds Account at the TD Bank.
The Dividend Monk continues his series on big companies with big economic moats in 12 Dividend Companies With Large Patent Shields. As the Monk points out, these are companies that have years and even decades of profitability from the production of durable goods with little competition.
The Passive Income Earner had been running a survey on his site for the last couple of months, and he did a recap of his 2012 Investing Survey Results. He found some interesting results. For example, who would think half of the people who participated in the survey have a pension plan through work?
Have a nice weekend everyone!