From: Canuck57@nospam.com   
      
   Don't get me wrong, RRSPs are still valid investments but accumulating   
   too much can be detrimental to your tax health and here is why.   
      
   If your RRSP grows to a point where it generates an average growth that   
   pushes you into high taxation you could get into a situation where you   
   deferred 15% in taxes in, but pay 30% in taxes on the way out.  100% of   
   the RRSP will be taxable even in death, and the rates of taxation can   
   easily become more than you got up front in deferment years earlier.   
      
   As RRSPs get bigger, they have a lower after tax value.  So don't go   
   overboard into RRSPs, I generally suggest at 55 or 65, you don't want no   
   more than $150K in todays value dollars in an RRSP+LIRA.  You want just   
   enough to get the pension income spitting and pension deductions and   
   nothing more than this at the time of retirement.   
      
   Even a cash account can out perform a RRSP in after tax value if the   
   RRSP gets too big. As in a cash account you get lower taxation on   
   dividend and gains.  Better to pay the tax man 15% today on gains and   
   dividends than to pay 30% on RRSP withdrawal in future value.  As   
   inflation growth over the years will make a real problem.   
      
   But TFSA is a far the best choice.  It comes without the inflation tax.   
     Making it the #1 investment retirement account choice going.  Don't   
   even look at RRSPs until your TFSA are topped up.   
      
   Stacks up like this:   
      
   TFSA is the best!   
   RRSP to an amount you get the pension deduction/splitting from revenue   
   but no more.   
   Cash accounts!!  They will always be king.   
      
   Balance the above for maximum tax efficiency.  But TFSA and cash   
   accounts invested are your best choices for you, RRSPs that get too big   
   have some serious draw backs and even claw backs that will cost you more   
   in taxes and less in benefits.   
      
   But let us make it simple, I use the 4% rule.  If 4% of your RRSP+LIRA   
   plus CPP puts you into more taxes than you deferred going in, then you   
   have contributed too much to your RRSP.   
      
   And beware of tax greed, ever notice how CPP/OAS is just enough to wipe   
   out dependent deductions?  The $200K above limit maybe even too high for   
   most.  It is even possible you shouldn't contribute to an RRSP at all.   
      
   Why I know this and no longer contribute to RRSP.  I have done the math   
   and over contributed and now the RRSP is a net tax liability.  In fact,   
   I am slowly reducing my tax deferred accounts preferring cash accounts   
   for the lower tax rates on inflation and growth.   
      
   Good luck people, it is the season to be screwed by your own government.   
     Tax time!  $1000 saved in taxes is like $2000 earned!   
   --   
   Corrupt USA, Euro Bank and Military Regime, funding both sides of   
   terrorism for profit and debt-tax slavery.   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)