Can I withdraw from RRSPs to pay bills? + MORE Apr 20th

There are plenty of retirement plan options in Canada! Stay on top of the best plans right here.
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Piper makes a good buck as a lawyer but still has piles of school debt. Is her dream of owning a downtown Toronto condo realistic? + MORE Jan 25th

Financial adviser Jason Heath says Piper needs to get her debt and expenses under control before even thinking about home ownership and retirement.... More »
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How does age affect life insurance rates? + MORE Sep 14th

Most of us go through life assuming we’ll reach a ripe old age—and that’s fair, because most of us do. But if you have dependents, it’s wise to protect them from the financial fallout of your death—even if you’re still young and healthy—by getting life insurance. Your age is a pretty b.... More »

Making sense of the markets this week: August 28 + MORE Aug 31st

Kyle Prevost, editor of Million Dollar Journey and founder of the Canadian Financial Summit, shares financial headlines and offers context for Canadian investors. Banking on stability and caution Canadian investors love their banks. Year in and year out, banks provide dependable dividend growt.... More »
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Making sense of the markets this week: July 3 + MORE Jul 6th

While regular “Making sense of the markets” columnist Kyle Prevost is on vacation, Dale Roberts and I are filling in. Dale’s piece ran last week, and it’s my turn this week. Dale will return next week, after which a well-rested Kyle will resume.  Speaking of Dale, this week he wrote .... More »

Not sure what to put in your RRSP and TFSA? Make contributions anyway Feb 1st

If your financial goals include putting more money into your registered retirement savings plan (RRSP) and tax-free savings account (TFSA), here’s a strategy that can help: making year-round contributions to high-interest registered savings accounts. Whether you’re a saver or a stock picker, .... More »
Million Dollar Journey editor and Canadian Financial Summit founder Kyle Prevost shares financial headlines and offers context for Canadian investors.

If a TFSA and an RRSP had a child: The new FHSA

As part of the 2022 budget, the government unveiled its new tax-free first home savings account (FFHSA, but I prefer FHSA as it’s less of a mouthful). And it will be a great way for first-time homebuyers to save up part of their down payment. In a nutshell, here’s what to know about the FHSA:

It allows Canadians to save and invest $8,000 per year, up to a lifetime maximum of $40,000.If you miss contributing in a year, you can’t “make up for it” by carrying forward contribution room in the years to come like you could with a tax-free savings account (TFSA) or a registered retirement savings plan (RRSP).It blends the tax refund benefits that we love with the RRSP, along with the no-strings-attached non-taxation of withdrawals that the TFSA is famous for.Investment income from interest, dividends or capital gains are yours to keep tax-free…

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What are the cons to withdrawing RRSP savings of $25,000 to pay off some unexpected bills I have incurred?—Anonymous

Withdrawing RRSPs when you’re not retired

Ahh, the unexpected bills.

Anonymous, I’ll give you my initial thoughts first, and then I’ll review the cons of withdrawing from your registered retirement savings plan (RRSP) to pay off unexpected bills.

Assuming you’ve incurred the debt yourself and you’re not desperate—and I mean really desperate—don’t pay your bills with an RRSP withdrawal.

You acquired the debt on your own, so I recommend figuring out a way to pay it off without cashing in investments or consolidating loans.

When unexpected bills arrive, cash flow issues are normally the underlying culprit; either not enough income or too much spending. 

What can you do to increase your income or reduce your spending so you can pay off your bills? 

Withdrawing from your RRSP may seem like the easy way out. Paying off a debt by cashing in an RRSP or consolidating loans is just a temporary fix, and it starts a cycle…

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