earning 32K , is it good to open RRSP

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adnancanada
Member since: Jan 09

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Posted on: 09-02-09 16:14:46

i would like to ask you guys that my early earning 32K. Should I need to open RRSP what type of RRSP I should take . I want to buy house untill next year. Kindly suggest me how much I contribute. I can t contribute more than 100$

Please reply.

pratickm
Member since: Feb 04

Posts: 2831
Location: Toronto
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Posted on: 09-02-09 17:26:33

Quote:
Originally posted by adnancanada
i would like to ask you guys that my early earning 32K. Should I need to open RRSP what type of RRSP I should take . I want to buy house untill next year. Kindly suggest me how much I contribute. I can t contribute more than 100$

Please reply.

In your case, not contributing at this time appears to be a better options.
If you expect your income will be higher in the future, than it's better to build up your contribution room now and use it later when you might be in a higher tax bracket.

Also, since you need cash within a year, RRSP is not a good option.
Better to put the $100 in a "high interest" savings account until you need it.

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Bingo
Member since: Jan 07

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Posted on: 09-02-09 19:11:36

Where to park your money in a RRSP account itself ,it is confusing and made more by the so called F advisors ,what is the best option nowdays GIC,Stocks,Bonds ..?

investpro
Member since: Nov 06

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Posted on: 09-02-09 19:28:12

Quote:
Originally posted by adnancanada

i would like to ask you guys that my early earning 32K. Should I need to open RRSP what type of RRSP I should take . I want to buy house untill next year. Kindly suggest me how much I contribute. I can t contribute more than 100$

Please reply.

If u wish to buy ur first home in Canada next year then by contributing to an RRSP , u can withdraw (borrow) it to pay for down payment without tax nor interest.

For this purpose, best to contribute to a savings account or GIC.

However if u have 'kaleja' ( a stomach for risk), the stock markets are good. Global bond funds are also good.

investpro
Member since: Nov 06

Posts: 1628
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Posted on: 09-02-09 19:33:03

Quote:
Originally posted by Bingo

Where to park your money in a RRSP account itself ,it is confusing and made more by the so called F advisors ,what is the best option nowdays GIC,Stocks,Bonds ..?

If u r planning long term- go for equity mutual funds.

Once again this depends on your risk appetite.
There are guaranteed funds out there. Check with BMO- they have guaranteed funds in conjunction with Guardian Group of Funds and available at a discount!

If you prefer a mutual fund company- go with Clarington- also available at a discount.

all are good depending on your risk tolerance.

If u r looking for extra tax credits then go for labor sponsored funds - there are low risk ones out there as well.

Maybe I am confusing you more as I have thrown mutual funds into the mix which was not mentioned in your question.

Bingo
Member since: Jan 07

Posts: 198
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Posted on: 09-02-09 19:50:52

Thanks Invest pro for advice ,is there deadline to open this account ,how about parking your money for six months in a gic and wait for the markets down slump to stop.
Is there a option to invest this parked money at that time in any of those things mentioned by you.

DP_gta
Member since: Dec 07

Posts: 64
Location: GTA
Post ID: #PID

Posted on: 10-02-09 10:53:21

Quote:
Originally posted by Bingo

Thanks Invest pro for advice ,is there deadline to open this account ,how about parking your money for six months in a gic and wait for the markets down slump to stop.
Is there a option to invest this parked money at that time in any of those things mentioned by you.

All the above suggestions are good. I would like to add my 2 cents to it.(Other might think differently but this solely my take.)
Meat comes from equity market, they grow fastest. The market is unlikely to turn around for 3 yrs (they say maybe market will recover after going down a further 30%)
RRSP and TFSA are complimentary to each another

RRSP: Long term- if you are above 45, try GWMB you are assured of atleast 5% bonus growth with market downside & creditor protection, like Manulife Income Plus, IA Ecoflextra or Helios (the last two give 7% gauranteed bonus over and the above the equity growth). If you are younger yet have no stomach for risk but want the malai (cream) of market growth then go Seg fund like IA asset Allocation, CI Harbour,

RRSP Short Term: No Risk- go GIC 3.85% 5 yrs, RBC Monthly Fixed Income or any other fixed income fund, Hartford Bond Funds. (front/ back end)

For TFSA: Dividend value fund, High Yield Fund or even ETF's is a good idea
TFSA can be used as emegency fund, rain cheque, house buying plan, education plan etc. TFSA has many tax saving applications

Contributors: Bingo(4) pratickm(3) investpro(3) adnancanada(1) DP_gta(1) Ash20(1)

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earning 32K , is it good to open RRSP

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