From: Canuck57@nospam.com   
      
   WARNING: This contains information government and bank puppets will not   
   tell you.   
      
   Are RRSPs really a bad investment?  Possibly, especially if they get too   
   big.   
      
   Here is why.  Say your RRSP is a huge $1M, and you die.  Most of it will   
   be taxed with a chain saw at the highest rates possible.  Even in death,   
   you get a tax screwing but even while you are alive this can happen.   
      
   Second, if your RRSP is like most people RRSP a good portion, probably   
   more than 50% of it is gains and dividends.  But these gains and   
   dividends are fully taxed on withdrawal.  But if in a simple cash   
   investment account less taxes over all.   
      
   Taxing gains for example, as most gains are ultimately inflation is a   
   huge negative for RRSPs.  More inflation and presuming your RRSP is   
   tracking or doing better, then the inflation tax (gains tax) is a full   
   punishment.   
      
   For low and middle income earners, the tax deferment could easily become   
   15% deferred in and 30% taxed coming out.  Huge wind for Ottawa tax   
   greed.  If you are filthy rich, any withdrawals will get top rate so a   
   tax advantage is almost impossible to pull off.  A rigged game, Ottawa   
   greed always wins.   
      
   The only real way to leverage an RRSP to an advantage over TFSA or a   
   simple cash investment account is if you retire early and exhaust most   
   of the RRSP in early retirement.  But even then, this is hard to manage   
   as your cash account needs to be healthy for early retirement and it   
   generates income that raises your tax-ability rates.  Say you retire at   
   55, you have 5 to 10 years to draw down the RRSP as you don't get   
   CPP/OAS yet.  In this rare scenario, you ave a small way of making RRSP   
   of some advantage if you deferred 40% taxes in and say pay 15% on the   
   way out.   
      
   But still, taking gains due to inflation is better off in your cash account.   
      
   Basically, RRSP say over $100K at retirement is a certain tax trap.  You   
   want only enough annual RRSP income and withdrawals to leverage the   
   pension deduction available if you are over 65.  If you are younger,   
   disabled with a lower life span, your screwed as minimum age   
   requirements exist for pension income deduction of $2K.  Why $100K?  Any   
   1/2 baked investor can get $4K return on $100K and then use the pension   
   deduction and splitting.   
      
   Pension spitting too is a gimmick, the tax savings are minimal at best.   
     And of no value of both partners have incomes.  A small savings at   
   best if one partner has no income and the other is loaded.   
      
   Bottom line, a RRSP is a screwing.  A ruse, a fraud for most people.   
   Especially if it generates more than about $4K per year in income.   
   After this, there are no RRSP advantages.   
      
   TFSA is a hell of a lot better for EVERYONE as it doesn't carry the   
   inflation gains taxes.  Yep, instead of watching your RRSP become a net   
   tax laibility, TFSA don't have this issue.   
      
   Some could argue I deferred 20% in taxes going into an RRSP.  Well,   
   taxes on $1000 is $200 deferred.  When it say becomes $4000 after   
   inflation plus growth, you get a $1000 tax bill.  Might be better to pay   
   taxes now than more taxes later.   
      
   To add insult, after you die a large RRSP is going to get the top rates   
   in taxation big time.  Even your estate and beneficiaries get screwed.   
      
   So if the bank suggests RRSP before TFSA, tell them to stuff it as you   
   will get your advise elsewhere.   
      
   Just another way Ottawa screws you that you may not have known existed.   
      
   --   
   China makes products people want.   
   USA makes war no one wants.   
   Ottawa taxes in ways you don't even know exist.   
   See why USA and Canada is going broke? They need war or big fat   
   government or no economy.  And you pay for it.   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)