A Bit Of My Life

When I was working in the corporate world, RRSP’s were the only tax break available to me. It was the only way that I could not pay tax for the year. I would rather put the money in an RRSP than give it to Revenue Canada, and that is how I justified it.

A couple of years ago, a family member was affected by new rules on income trusts put in place by the Canadian government by a party that is supposed to stand for no government controls on finances, except of course where it suits them. After this infraction, I will never again trust any retirement plan.

The problem is that the government will always see any accumulated nest egg as a potential source of taxation income. Those nest eggs get too tasty after a while. In my generation alone we’ve seen the introduction of RRIF’s, a secondary “wash” for your RRSP money so that the government can get more of a taste, and the elimination of income trusts. The bottom line is that I no longer trust the government when it comes to my retirement savings.

If you are employed full-time, start a part-time business. This will allow you to enjoy near-equivalent tax breaks to getting an RRSP. It will be more work and you may need an accountant to manage it, but it is perfectly legal. Talk to your accountant about other ways to save for retirement; there are much better ways than crappy mutual funds that you are forced to select as your only option when your money is locked into an RRSP.