From: Canuck57@nospam.com   
      
   On 28/01/2014 7:24 AM, Alan Baggett wrote:   
   > RRSP scenarios change for teens, low-income retirees : CRA SOTW   
   >   
   > By Terry McBride,   
   > The Starphoenix January 20, 2014   
   >   
   > For most Canadians, a Registered Retirement Savings Plan (RRSP) is a very   
   good way to save money for retirement. However RRSPs require special   
   consideration by three types of Canadians - teenagers, low-income earners and   
   U.S. citizens.   
   >   
   > Teenagers Are you eager to teach your teenager about the benefits of   
   starting to save money at a young age? Suppose your child received wages from   
   babysitting or mowing lawns, for example. That means your child can file tax   
   returns to report this    
   income, without paying tax, to generate RRSP contribution room for the   
   following year. If your child opens an RRSP, he or she could make RRSP   
   contributions even before reaching the age of majority (18 in Saskatchewan).   
   Parents or grandparents should not    
   try to help out by making additional gift-contributions to the RRSP. There is   
   a stiff penalty charged on contributions that exceed the teenager's RRSP limit.   
      
   Anyone recommending young people do RRSP is quite frankly insane,   
   corrupt or both.   
      
   Less than 1% of the people should do RRSP before they are 50 years of   
   age.  Without a end of life tax plan, RRSP is now a tax trap.   
      
   If inflation was zero, tax rates constant for all, then RRSP is the same   
   benefit of TFSA.  But add in reality of inflation as a tax, and that   
   taxes never go down....TFSA is a big winner and RRSP is a loser.   
      
   Just accumulate RRSP room in normal course of life to get a 50 something   
   retirement plan.  So if you become 50, they lay you off with a 6 month   
   income bump into high tax situation, you can use the room to income tax   
   rate average down.   
      
   As in retirement, you add CPP+OAS+other incomes you will be taxed at   
   least 25% on all income you pull out of a RRSP, and probably at 33% to   
   43% if that other income gets much past $15k/year.   
      
   People under 50 should do TFSA and forget RRSP as TFSA is more flexible,   
   comes without inflation taxes, and if tax rates change they are   
   relatively immune to government tax greed.   
      
   Even a cash account does better after inflation and tax greed as you get   
   some capital gains and dividend credits with taxes spread out over   
   decades....and no huge tax bumps as you want to buy a boat or other   
   retirement toys and world like cruise events.   
      
   RRSP are massively over rated tax traps.  $1000 of RRSP gains will   
   likely see a 1/3rd or more in taxes, cash accounts will see 1/5th in   
   taxes and a TFSA $1000 sees NO taxes.   
      
   Do the math people.  Corrupt governments and banks love you locked in to   
   RRSPs as it benefits them, not you.   
      
   Only reason to have RRSPs is in retirement and over 50+ when a realistic   
   and near term tax plan can be formulated.  But in your 20s, 30s, 40s you   
   don't have a certain enough future to consider RRSP tax planning.   
      
   --   
   Socialist-statism corruption is a great idea so long as the credit is   
   good and other people pay for it. When the credit runs out and those   
   that pay for it leave, they can all share having nothing but   
   unemployment, debt and discontentment.   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)