# Anyone else here having tough time maxing both TFSA and RRSP?



## techcrium (Mar 8, 2013)

If you make $50,000 per year, you can contribute $9000 RRSP and $10,000 TFSA


Your take home is around $38,000 after tax. Thus, you need to save about 50% of your take home and live on just $19,000 per year.

That translate to living on $1580 per month.

Tough but not completely un-doable. 

In order to max both accounts, you will definitely have to
-Live with roommates
-Brown bag lunches everyday
-No coffee
-A car will definitely kill your plan (Example: $150 insurance, $200 gas, $100 parking)
-No going out drinking

However, if you plan on going on vacations or treating yourself once awhile, its gonna be really tight this year...


Even if your salary was $68,000, that translates to $47,000 per year...

Less ($12,000 RRSP and $10,000 TFSA)

you need to live on $24,760 per year which equals $2063 per month.


A home is definitely out of the question on a $68,000 salary as well.


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## gardner (Feb 13, 2014)

There is no reason your vacation money or down payment money or anything else with a ~12m or more time horizon can't live in your TFSA while it's accumulating.


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## techcrium (Mar 8, 2013)

gardner said:


> There is no reason your vacation money or down payment money or anything else with a ~12m or more time horizon can't live in your TFSA while it's accumulating.


Then you aren't really maxing out your TFSA...

If you save $5,000 for vacation and put it into your TFSA only to take it out next year to spend....then next year you will need to somehow come up with $15,000 to contribute...


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## Fraser19 (Aug 23, 2013)

I cannot max either one at this time.
I put around 5,500 in my RRSP, due to my employer matching my contributions, so 2,250 each. I have been putting about 4,000 away each year into my TFSA. By November I should have no debt and then I will boost my TFSA by another $500 a month if the limit dose indeed double. 

Both are all equity. Being a young guy I want to put more into the TFSA as I suspect it is possible that I will be pay a fair bit of tax in retirement if I keep saving as I am and continue to increase my savings.


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## FinancialUnderdog (Mar 30, 2015)

We have no problems maxing out TFSAs/RRSPs even though our income is below average. But we don't have kids yet - and I heard they're expensive, so ask me again in couple of years


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## none (Jan 15, 2013)

I max out both and I make 65K. Almost half of my RRSP contributions though are done by my employer which makes it easier.

I live alone with the exception of my special little guy half time - plus pay for day care + i'm giving ~$1600 to charity this year.

The thing that makes it possible is that I don't own a car. That's the winner. A car saves me between 6-10K a year and therefore covers my 10K TFSA contribution (if you include the RRSP tax deferment payment)


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## CalgaryPotato (Mar 7, 2015)

I have money in both but neither is maxed out. I'm not sure as a percentage of this board, but I'm guessing the percentage of Canadians with both maxed is probably under 10%. With the new contribution limits, it would take over 40% of my pretax salary to max out my RRSP, my wife and my TFSA's and both my kids RESPs.

And gardner makes a great point, while for some it makes sense to max out both RRSP and TFSA for retirement. For many it makes sense to use the RRSP for retirement, and at least while younger, use TFSA for shorter term savings. If you take money out, you can reuse that contribution room in a later year anyway.


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## nathan79 (Feb 21, 2011)

It'll be a struggle for me to max the TFSA alone. I only use my RRSP for tax optimization to keep me in the lowest bracket. 

Rather than put everything in registered accounts, I have some dividend paying stock which actually saves me some tax due to the enhanced dividend tax credit.


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## jamesbe (May 8, 2010)

Don't think I'll max the TFSA this year, but I also fill up my spouses TFSA.

So for us that is about $20,000 in RRSP per year and now $20,000 in TFSA per year. Until this year the everything was maxed. I think I'll be short $5000 this year but I also bought 2 cars this year. Maybe I can catch up next year!


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## Ag Driver (Dec 13, 2012)

At this point in time, I am only utilizing about 1/3 of my TFSA. I am a young, single homeowner. I typically shoot for 10% of my take home towards my investments/savings.


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## Eclectic12 (Oct 20, 2010)

techcrium said:


> If you make $50,000 per year, you can contribute $9000 RRSP and $10,000 TFSA ...


Maybe there's $9K RRSP contribution room and maybe there isn't ... there's a lot of variables that go into the 18% x earned income. 

For example, where one is contributing to a DC pension - the PA is going to reduce the RRSP contribution room earned, $ for $ of both employee and employer contributions.

A DB pension will have a much larger PA, slowing down the rate at which RRSP contribution room is being added.


IAC ... where one plans to contribute to the RRSP - why would one use after-tax dollars when one can file a T1213 "Request to reduce tax deductions at source for year ####"? 

Regular contributions to an RRSP is one situation that will allow the taxes withheld by the employer to be reduced. One will get the refund throughout the year, making it easier to contribute to the TFSA.


Alternatively, where one's employer has a suitable Group RRSP ... this will also allow the refund to be used right away. I was quite happy to shuffle overtime that would have been more heavily taxed then regular income into the company Group RRSP, so that no income tax was taken off.


Cheers


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## avrex (Nov 14, 2010)

*Case Study: The Average Canadian Couple*

I made an error in the calculation when I originally composed this post.

Instead, jump ahead in the thread, to this post.




> There are many factors that will influence whether you can max out both your TFSA and RRSP.
> 
> *1. * *Your salary* is the probably the biggest factor in determining whether you can max out both your TFSA and RRSP.
> *2. *Once your *house is paid off* (and all other debts are gone), you can direct more of your income towards savings.
> ...


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## newfoundlander61 (Feb 6, 2011)

I could never do both, picked the TFSA 2 years ago.


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## gibor365 (Apr 1, 2011)

> It only appears that only high salaried Canadians will be able to maximize both their TFSAs and RRSPs.
> 
> The average Canadian couple can maximize either their TFSA or the RRSP.... but not both.


In your calculations you missed fact that majority of full time workers have some kind of group registered plan or pension adjustment, or both ... for example I have GRRSP and after mine and employers contribution only $3,200 room left....

Another not so rear scenario -> laid off and packages (half of our company got in this category), in order not to pay huge taxes -> people maxed up conrtibution room (exactly what my wife did)...

Also, majority getting refunds from CRA -> also can go to RRSP/TFSA

and last, but not least - many people (esp. imdependend workers)are not declaring their income in full


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## cainvest (May 1, 2013)

techcrium said:


> In order to max both accounts, you will definitely have to
> -Live with roommates
> -Brown bag lunches everyday
> -No coffee
> ...


I'd choose coffee over TFSA anyday.


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## gaspr (Mar 24, 2014)

If I had to choose between growing a business or funding a TFSA, I would definitely put the cash toward the business. When you do sell the (hopefully) successful business down the road, put the proceeds into all that unused TFSA... Even if you don't use the room now, it could come in very handy in the future.


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## indexxx (Oct 31, 2011)

I'm currently paying down a bit of LOC debt, but after that's gone I'll come close to maxing out each one every year, and I make an average salary. It helps that I get a meal plan, parking, full medical and 150% RRSP match from my employer, and that I don't drink, smoke, drink coffee, or watch TV (no cable bill, DVDs from library). This includes my mortgage, condo fees, cell and internet plan, food, gas, insurance, gym, and entertainment. My entertainment costs mostly consist of money for travel (budget backpacking in cheap countries), and guitar and camera gear with a few movies out once in a while- if I'm not working, I'm usually in the gym, playing guitar, or hiking with my camera. If I was currently dating someone my costs would go up- looking forward to that happening at some point soon! Going to get pets soon so a bit more per month there. As mentioned above, it's possible but takes diligence and sacrifice.


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## OnlyMyOpinion (Sep 1, 2013)

indexxx said:


> ...travel (budget backpacking in cheap countries)...Going to get pets soon...


Must have a solution for this conundrum? (our kids suffered the absence of pets so we could travel frequently).


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## sags (May 15, 2010)

The general consensus seems to be :

First you need a decent income.

Second you need to manage the decent income well.

Third you need a commitment to saving money, rather that rewarding yourself for having achieved the first two.

Unfortunately most people get caught up in either the first or second.......so the third doesn't happen.

CMFers excluded, I think mandatory saving is the only thing that will save the majority, and without it someone else is going to pay for their retirement.........meagre as it might be.


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## janus10 (Nov 7, 2013)

Avrex you wrote, "The Canadian household that is a defined as a 'couple', has a median income of 82,000. We'll assume that 14,000 of that is income tax. " Would I be correct in concluding you forgot CPP/EI contributions?

And, thus, their income after deductions is closer to $62k rather than $68k? Then how can the average Canadian household have expenditures of $75,400? While any single family may spend more than their declared income, it is hard to imagine a monthly deficit of >$1k could go on very long nor be the average of a Canadian family. The reason is, if you look at the link you provided, income taxes form part of that $75,400 expenditure. So, you've double taxed our average family.


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## CalgaryPotato (Mar 7, 2015)

sags said:


> The general consensus seems to be :
> 
> First you need a decent income.
> 
> ...


The problem here is that a lot are assuming that everyone needs to max their RRSP & TFSA. That doesn't make sense for a lot of people, especially depending on when they start saving.

Lets take a very average middle class couple. Each makes 50K a year. They are 25 and they have just bought a house and may or may not plan to have kids. If they invest their full RRSP & TFSA every year until they are 65 and get 4% average, they will have 3.6 million at the time they retire. That is probably way too much for this couple, as why do they need a higher salary at this point than they did back when they had a mortgage and maybe kids, and were paying into CPP & EAI out of their incomes. Not to mention the TFSA side of their income would be tax free, so they'd have probably close to double after tax income at this point if they took out the 4% per year that it makes. Die at whatever age, with $3.6Million in the bank. It doesn't make sense.

If someone rents for life, they would be more likely to have extra money that they can invest throughout. If someone doesn't have any savings, at the point when they are hitting their 40's/50's. Then yes they should fill up every last bit of contribution room to try to get the growth in time. 

For me, I've been paying into a defined benefits pension plan since I was in my very early 20's. If on top of that I max out both my wife and my leftover RRSP room, and fill both our TFSAs for the sole purpose of retirement, I'm going to end up with more money in retirement than I'm making now. But I'm hoping to have less expenses. If my goal was to leave a large inheritance that is fine, but I don't even know if my kids are going to have their own kids some day. So being overly frugal now with the goal of having millions to leave to future relatives who may or may not exist, isn't appealing.


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## wendi1 (Oct 2, 2013)

I didn't max them all out every year - now that I have paid off my mortgage I am playing catch-up.


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## Gimme the Green (Feb 4, 2014)

I don't max out either one. I have chosen to focus on TFSA though as my main savings vehicle. I use it strictly for retirement purposes. I aim for 20% of my pre-tax income in there. Wife and I will have our house paid off in about 2 years and at that time I will be 38 years old. That is when our savings will really increase.


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## none (Jan 15, 2013)

The problem with the RRSP/TFSA program is that they are independent. It should be an either or thing. I'm going to do some math and write to the liberals/NDP to suggest that the way these programs are designed should give you 20% of salary that can be used in TFSA or RRSP (or partially of both). To me that would be more fair to all financial classes.

Whether we should have capital gains tax free is the result with how the program currently set up.

I'd have to think about what to do about before and after tax dollars to even the field though.


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## Cal (Jun 17, 2009)

In a way, it is more unfair to the 'wealthy' as they are only able to shelter a smaller % of their earned income from investment taxes. For many of them their cost of living is proportionately higher to their income. So I would play Devil's Advocate and argue the TFSA rules are unfair to the wealthy. Yes, fully aware I won't get any sympathy here, but sometimes when I read the papers about how unfair it is for the middle class it sounds like a pity party.


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## gibor365 (Apr 1, 2011)

> Yes, fully aware I won't get any sympathy here,


 You get mine 

imo it's much easier to max up TFSA than RRSP, regardless on contribution room , even 20K per year, on Jan 2 of each year, I'd transfer all non-reg savings from chq and saving accounts to TFSA (up to max allowed), and if I need money during the year, I'd just transfer back to chq amount I really need.
It will also teach you financial discipline, as you try not to transfer out money from TFSA if it's not really essential.
With RRSP it's more complicated as you need to pay withdrawal taxes..


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## Cal (Jun 17, 2009)

As many users of the HBP are now learning, as apparently a large portion of them are not repaying the borrowed RRSP monies. Like you said, financial discipline is important-----at any wage level.


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## CPA Candidate (Dec 15, 2013)

What's the need to max out both? If time is on your side and your returns are decent, you don't have to live like a pauper to have a good retirement.

There is a healthy balance to living for today and for the future.


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## mind_business (Sep 24, 2011)

For me it's been very easy to max out my RRSP contributions, mainly because my DB Pension Adjustment amount reduces my amount I can contribute to an RRSP by a LOT. TFSA(s) were maxed out up until I had to pay for our new vehicle. Now we're refocused on maxing it out. Should be done is about 6 months. 

Personally I'm quite happy with the increase to $10K, however realistically I realize it doesn't help out the majority of Canadians whom can't afford to ever max out their TFSA(s). Not that it helps me one bit, but I do think the government should implement 'forced' savings into a pension. Either increase CPP contributions, or do what Wynne is doing.


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## stephenheath (Apr 3, 2009)

avrex said:


> ...So, let's look at the scenario of a couple living together who has finally paid off their home.
> The 2012 Statistics Canada numbers can give us some average numbers for Canadians, to see if they can pull off this feat.
> 
> The Canadian household that is a defined as a 'couple', has a median income of 82,000. We'll assume that 14,000 of that is income tax.
> ...


While it does look possible (and kudos for insightful and well documented calculations) like others above, I question if it's really necessary. 

Personally, I'm maxxing my TFSA to give me flexibility in the long run, and only putting in enough into my RRSP to meet my retirement goals, and this new increase to 10000, if it stays, is going to lower my RRSP contributions significantly as I max my TFSA first and then only fill up the RRSP to reach my target.


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## avrex (Nov 14, 2010)

Good catch, Stephen and Janus.



stephenheath said:


> ...for Income Taxes, but you've already removed that from their revenues...





janus10 said:


> ...you've double taxed our average family.


You're correct. I mistakenly wasn't consistent with my treatment with income taxes on both sides of the equation. 
I'll revise and try again.
thanks.


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## avrex (Nov 14, 2010)

*Case Study: The Average Canadian Couple*

There are many factors that will influence whether you can max out both your TFSA and RRSP. 

*1. * *Your salary* is the probably the biggest factor in determining whether you can max out both your TFSA and RRSP.
*2. *Once your *house is paid off* (and all other debts are gone), you can direct more of your income towards savings.
*3. *If you *live as a couple*, you have a greater opportunity to save money, as you can take advantage of shared expenses, versus those who are single.

So, let's look at the scenario of a couple living together who has finally paid off their home.
The 2012 Statistics Canada numbers can give us some average numbers for Canadians, to see if they can pull off this feat.

The Canadian household that is a defined as a 'couple', has a median income of 82,000.

The average Canadian household has expenditures of 75,400. The principal accomodation/shelter component of this is 30,200. 
Therefore once this couple has paid off their house, their expenditures have fallen to 45,200.

If we subtract their expenditures from income (82,000 - 45,200) they now have *36,800* that they can apply to their registered savings.

In this couple's case, they should probably maximize their TFSAs first (i.e. before their RRSP) 
Therefore, they will apply 2 x 10,000 = 20,000 to their TFSAs.

That leaves them with 36,800 - 20,000 = 16,800 to apply to their RRSPs. 
They are allowed to contribute 18% of their salary, 14,800 (i.e. 82,000*0.18) to their RRSPs.

In fact, they have 2,000 extra this year. 
(They can use that and future amounts to catch up on any previous years missed contributions.)


*My Conclusion:*

It appears that the 'average' Canadian couple *is able to maximize both of their TFSA and RRSP accounts.*


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## indexxx (Oct 31, 2011)

OnlyMyOpinion said:


> Must have a solution for this conundrum? (our kids suffered the absence of pets so we could travel frequently).


I'll either board them or get a friend or neighbor to look after them when I travel.


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## fplan (Feb 20, 2014)

techcrium said:


> If you make $50,000 per year, you can contribute $9000 RRSP and $10,000 TFSA


if you make 50k its better to contribute 6k into rrsp ( 50k-44k). 44k is where 22% tax kicks in.. unless if you get employer contribution , there is no real benefit for extra 3k. you are saving 15% tax which is already low.when you withdraw also you pay the same tax rate.. if the tax rates stay same.. you can contribute max to tfsa and some to RRSP is better deal ..


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## fplan (Feb 20, 2014)

avrex said:


> The Canadian household that is a defined as a 'couple', has a median income of 82,000.
> [/B]


if couple makes 82k ( 41k each).. its not good strategy to contribute to RRSPs unless if they get matched contributions from employers.. for them TFSA is better..


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## avrex (Nov 14, 2010)

That's what I said. 

For this couple, they should contribute to the *TFSA first.*
Once that's maximized, contribute to the *RRSP next.*


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## none (Jan 15, 2013)

I think it's a bit of a wash at those income levels really. If you retire in the same tax bracket as you put money in then the TFSA and RRSP are mathematically equivalent with the exception that the RRSP has better foreign tax protection.


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## Synergy (Mar 18, 2013)

avrex said:


> That's what I said.
> 
> For this couple, they should contribute to the *TFSA first.*
> Once that's maximized, contribute to the *RRSP next.*


If the income received was split evenly (41K each) I'm not sure I'd be contributing to the RRSP. At least not to the point of dropping down to the next lower tax bracket, etc. I'd put the rest into a non-reg account. TFSA first, optimize the RRSP and put everything else into a non-reg investment account.


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## Guban (Jul 5, 2011)

CalgaryPotato said:


> The problem here is that a lot are assuming that everyone needs to max their RRSP & TFSA. That doesn't make sense for a lot of people, especially depending on when they start saving.
> 
> Lets take a very average middle class couple. Each makes 50K a year. They are 25 and they have just bought a house and may or may not plan to have kids. If they invest their full RRSP & TFSA every year until they are 65 and get 4% average, they will have 3.6 million at the time they retire. That is probably way too much for this couple, as why do they need a higher salary at this point than they did back when they had a mortgage and maybe kids, and were paying into CPP & EAI out of their incomes. Not to mention the TFSA side of their income would be tax free, so they'd have probably close to double after tax income at this point if they took out the 4% per year that it makes. Die at whatever age, with $3.6Million in the bank. It doesn't make sense.


What doesn't make sense is that if they think they have too much money, they can retire and stop the RRSP contributions far sooner. Wouldn't most people agree that if they are nearing getting too wealthy, they at least have the option of walking away from employment?


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## fraser (May 15, 2010)

The good thing is that they are both cumulative. 

Even if you cannot afford to fund them in certain years you will not loose the room. It can be used at a later date.


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## Sherlock (Apr 18, 2010)

Life is easier for couples.

As if it's not punishment enough that I can't find a girlfriend, I have a harder time financially because of it too.


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## none (Jan 15, 2013)

So why such a hard time? Have you tried internet dating?

There are only 3 simple rules to internet dating:
1) Don't be ugly;
2) Be charming & funny;
3) Don't be ugly.


Since my divorce I've been surprise how much demand a tall man with a good job is. If you have that then you're gold.

Here some extra:


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## cainvest (May 1, 2013)

Sherlock said:


> Life is easier for couples.


Not always, sometimes it accounts for a 50% investment downturn that'll never recover no matter how long you wait.


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## Sherlock (Apr 18, 2010)

none said:


> So why such a hard time? Have you tried internet dating?
> 
> There are only 3 simple rules to internet dating:
> 1) Don't be ugly;
> ...


Dammit, I already broke rules 1 & 3. I'm so ugly my birth certificate is an apology from the condom factory.

I hear you about the divorce though.


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## KaeJS (Sep 28, 2010)

Sherlock said:


> Life is easier for couples.
> 
> As if it's not punishment enough that I can't find a girlfriend, I have a harder time financially because of it too.


Girlfriends can be more trouble than they are worth. Don't forget this.

Also - There is a big difference between a girlfriend that is "wife material" and a girlfriend that is hanging around to pass the time. The latter will probably put more dents in your financial plan than being on your own. I have yet to meet one that is wife material, but I blame my age bracket and social media for that one.


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## KaeJS (Sep 28, 2010)

none said:


> So why such a hard time?
> 
> Since my divorce I've been surprise how much demand a tall man with a good job is. If you have that then you're gold.


Really?

It seems like "in demand" men equates to broke douchebags with lack of skill in every facet of life. However, as I said in my previous post, that could be due to my age bracket.
Women are constantly "falling" for the damaged men, or the one's who have nothing. This is understandable, as the men that usually have nothing and are going nowhere are a "thrill" in the current present. Women like thrills and adventure (as do men). These men are the type of men that spend money going out and appear to be carefree and confident. In reality - they have nothing. They don't even have the girl that is attracted to them, since 95% of females want a family and to get married someday. How is a female going to do that with a guy that is broke and looking to go out every weekend?

But hey - Either I have it all figured out, or I don't know anything at all. What I do know for certain is that when it comes to dating, I no longer have patience. Either you like me or you don't. If not, have a great life. I have enough friends. I don't need any new ones.


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## none (Jan 15, 2013)

KaeJS said:


> Really?
> 
> It seems like "in demand" men equates to broke douchebags with lack of skill in every facet of life. However, as I said in my previous post, that could be due to my age bracket.
> Women are constantly "falling" for the damaged men, or the one's who have nothing. This is understandable, as the men that usually have nothing and are going nowhere are a "thrill" in the current present. Women like thrills and adventure (as do men). These men are the type of men that spend money going out and appear to be carefree and confident. In reality - they have nothing. They don't even have the girl that is attracted to them, since 95% of females want a family and to get married someday. How is a female going to do that with a guy that is broke and looking to go out every weekend?
> ...


Sounds like you need a lesson in romance my friend. Romance is fun anyway, and is an ends unto itself. Most people are genuinely really interesting. You need to see that.


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## peterk (May 16, 2010)

none said:


> Since my divorce I've been surprise how much demand a tall man with a good job is. If you have that then you're gold.





KaeJS said:


> Really?
> 
> It seems like "in demand" men equates to broke douchebags with lack of skill in every facet of life. However, as I said in my previous post, that could be due to my age bracket.


Yes you're both right! none is older (late 30s?) and probably looking for women in their 30s. Tada! An abundance of women that are "demanding" a tall man with a good job.

KaeJS is mid 20s and probably wants a hot girl in her early 20s. Tada! An abundance or ratchet girls with smartphone and alcohol addiction who are not interested in a man with money or a future. 

I don't think KaeJS needs a lesson in romance. He needs a lesson in lifting weights (do you even lift? If so, apologies) , making more money, and accepting the world for what it is and enjoying it, instead of being depressed about what we wish it could be.


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## none (Jan 15, 2013)

^ Nailed it. 

I'm early 40's and gravitate to women in their mid-30s. I find it particularly weird the amount of 'hot points' i get for simply being tall. Really? I don't really see it as much of an asset. I bash my bald head all the time. It's annoying. Anyway, if KaeJS is short I'd suggest he give up. Nobody likes short people. NOBODY. You might as well become a Eunuch 








Perhaps I should try mid 2-'s and see what KaeJS is talking about.


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## Sherlock (Apr 18, 2010)

Well I'm tall and I lift and it hasn't helped me. A girl will choose the short guy with an attractive face over the tall muscular ugly guy every time.

Having money doesn't help either. It might help in eastern europe or asia, but here in the west women of Generation Y are out-earning Gen-Y men, so having a good stable job doesn't really make a guy appealing to most women. If anything it makes you less appealing. The software developer earning 70k is boring, while the aspiring artist/poet/guitarist who can barely feed himself is exciting.


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## none (Jan 15, 2013)

Keep in mind the road goes two ways. If you're shallow and inky want to date beautiful people and you're not beautiful.... See what I mean. Charm and confidence goes a long way.


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## KaeJS (Sep 28, 2010)

Sherlock said:


> The software developer earning 70k is boring, while the aspiring artist/poet/guitarist who can barely feed himself is exciting.


Bingo.

And you don't want a woman like that. They either lack foresight OR they understand this and take advantage of people and situations. Both are scary outcomes.

Females, for the most part, have their pick of man. No sense trying to find one or convince one to like you. Just be you and make as much money as you can. Do the things you like doing and be a man about it.

Go do manly things. Drink alcohol. Smoke a cigar. Shoot a gun. Drive fast. Whatever it is that you enjoy doing, make sure you are always doing it.

All women, regardless of age, are attracted to men for doing the manly things they do. You won't snatch a girl by knitting and watching Grey's Anatomy.


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## KaeJS (Sep 28, 2010)

It's not that I'm depressed about the way things are. I am aware of the way things are. As such, I tend to stay away from anything that could result in an unrecoverable 50% decline in net worth. 

I don't really lift, but I'm 6ft and 175lbs. Pretty typical/average if you ask me.

Having a girl isn't my concern. I could have many. Having the girl I am looking for is the issue.


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## Westerncanada (Nov 11, 2013)

KaeJS said:


> It's not that I'm depressed about the way things are. I am aware of the way things are. As such, I tend to stay away from anything that could result in an unrecoverable 50% decline in net worth.
> 
> I don't really lift, but I'm 6ft and 175lbs. Pretty typical/average if you ask me.
> 
> Having a girl isn't my concern. I could have many. Having the girl I am looking for is the issue.



This is the eternal struggle.. or in the words of the Hot Tub Time Machine... "Great White Buffalo".


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## none (Jan 15, 2013)

Wow. Do we ever live in different worlds. Here's a tip. Referring to women simply as females is a bit of a red flag


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## gibor365 (Apr 1, 2011)

> I tend to stay away from anything that could result in an unrecoverable 50% decline in net worth.


 Look at future potential  When I got married I was in decline in net worth , but now I;m in appreciation more than 200%


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## KaeJS (Sep 28, 2010)

none said:


> Referring to women simply as females is a bit of a red flag


It's only a red flag for people who are picky.

The words are nearly synonymous. Just that the word "women" refers to females generally above 18 years of age.


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## Cal (Jun 17, 2009)

CPA Candidate said:


> What's the need to max out both? If time is on your side and your returns are decent, you don't have to live like a pauper to have a good retirement.
> 
> There is a healthy balance to living for today and for the future.


Back to the OP. I personally have no problem with someone who wants to spend all of their retirement money now, while they are young and healthy, as long as they are aware of their choices. They should live the life they choose to live.


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## Jon_Snow (May 20, 2009)

I don't know if the recent turn in this thread is funny or sad.

I do know that I wouldn't be accepting relationship "tips" from certain individuals here.


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## donald (Apr 18, 2011)

Kaejs-Your still in the age bracket where women have the greatest advantage!
Young women 25 and under(hot ones)wield unbelievable power
I know and remember the struggle 
If you ever find yourself dating in your 30's due to circumstances it is like night and day!!
The tables get turned
Men's stock rises generally as one ages where women stock falls
Mid 30's is a unreal age bracket to date in
Your options expand to almost every class of women,from 20-40,divorced and infidelity(morally wrong but this is not just a man desire)
Most men are married and tied down by than so most men can't take advantage of this
I love being single,so glad my ex of years and someone i was very serious with left me---best thing that ever happened(feel for the poor sap she is with)
anyways i think in a lot of ways saving is easier being single(You have 100% control and discretion of how to allocate-that goes a long way)


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## donald (Apr 18, 2011)

I am about 5'11
I don't buy the tall thing
as long as you are not the height of a 12 yr old boy you should do fine
it is easier to look better at this height(from how clothes fit to symmetry)
Most of my buddies that are 6'3 and over either look like john goodman or ichabod crane lol...


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## Causalien (Apr 4, 2009)

Play it on hard. Get woman without using your status and money. Then you know it's for real. Have a few and think about which one might be a good wife. If not, life is also fun without a wife too.

Hint: I am that broke vagaboubd you are talking about.


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## avrex (Nov 14, 2010)

Gee, let's get this thread back on the rails <says the older married guy> 

_Anyone else here having a tough time maxing both TFSA and RRSP? _


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## Plugging Along (Jan 3, 2011)

Okay back to the OP, yes, I will find it challenging to max out both, with the new amounts. and my spouse and I are iboht high income. 

Part of the reason, is that my spouse is no longer making employment income, so it doesn't make sense to max his RRSP. We will have income coming through our corporation, and it doesn't make sense yet to do a large contibution. We will max our the TFSA, but are waiting until his work stabilizes. This year, there will be no contributions, unless that changes.


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## none (Jan 15, 2013)

avrex said:


> _Anyone else here having a tough time maxing both TFSA and RRSP? _


Good idea. I can't remember if I answered the actual question or not.

My answer is no - I won't have an issue. Actually, I'll need to use a fair bit of non-registered room but of course I'll just keep my Canadian equities there. Yet another sweat heart deal to the wealthy thank you government of Canada (Honestly, I can't believe how shameless Canada is in how it's in the back pocket of the financial industry - it's pretty shameful).

Anyway, I've committed myself to 1000 days of austerity. Meaning for the next 3 or so years I will be saving approximately 60-65% of my income.

The goal of that is I should have enough then to retire on (after another 22 years of growth) once I slap on a 25 year government pension.

Seems like a decent plan.

That or I figure that the housing correction should be full blown in 3-5 years so I want to be well positioned for that. I figure I'll either have a great retirement nest egg or be in a great position to buy a house with a substantial down payment. Either/or I'll win.


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## nathan79 (Feb 21, 2011)

donald said:


> I am about 5'11
> I don't buy the tall thing
> as long as you are not the height of a 12 yr old boy you should do fine
> it is easier to look better at this height(from how clothes fit to symmetry)
> Most of my buddies that are 6'3 and over either look like john goodman or ichabod crane lol...


Are you suggesting that 5'11" is short or something, because that seems rather tall to me... I'm 5'8". I know I'm on short side of average but I always considered "short" to be like 5'6" or less...


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## gibor365 (Apr 1, 2011)

nathan79 said:


> Are you suggesting that 5'11" is short or something, because that seems rather tall to me... I'm 5'8". I know I'm on short side of average but I always considered "short" to be like 5'6" or less...


I'm 180 and I max both


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## donald (Apr 18, 2011)

No not at all Nathan
but....height is obviously important to women
I was just saying at kaejs height it's a non issue
Will say though the vast majority of young women filter with height
I always remember from years ago watching a 20/20 special where they had a program about it: short and male or something
It had some type of finding that a 5'6 millionaire doctor wouldn't stand a chance against a 6'0 male with a average job/looks ect
females are harsh towards short men.


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## avrex (Nov 14, 2010)

gibor said:


> I'm 180 and I max both


Awesome, you answered both questions. :applouse: LOL.


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## gibor365 (Apr 1, 2011)

avrex said:


> Awesome, you answered both questions. :applouse: LOL.


This was my intention


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## bgc_fan (Apr 5, 2009)

donald said:


> No not at all Nathan
> but....height is obviously important to women
> I was just saying at kaejs height it's a non issue
> Will say though the vast majority of young women filter with height
> ...


I remember that episode, IIRC the only time the women said they would pick the short man over the tall man is if the tall man was a multiple murderer or something along those lines. Even then it was a toss-up.

To answer the OP, I'll have some trouble, but it is primarily due to circumstances related to personal relationships. Maybe in a year or so I'll be able to catch up.


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## donald (Apr 18, 2011)

That is hilarious and true if i remember lol
Imagine if 20/20 did a special on fat women and had women lined up with one fat one and all the men rejected the fat chick?(on camera and serious)
Can just imagine all the feminist losing their **** and crying At nbc.....sorry off topic!


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## daledegagne (Apr 6, 2015)

*Do you REALLY need to max out both?*

@Techcrium you started an awesome thread.

Sounds like a lot of people have difficulty maxing them both. But are you sure you NEED to max both? How much do you need for retirement? How far away is that? Do you know? 

If you can't answer these questions, it's cool. Not a lot of people can. Let me break down for you to easily decide how much you should be contributing and where it should be going.

*Determining How Much to save and Which Account to invest it Through.*

*1. How much depends on How Long until you plan on using/needing the money? *

And I'm not talking 65 yrs old. If you want to be done at 45, then that's cool to. Either way, figure out how long it's going to be. 20 years? 26 years?

*2. Take a look at this simplified chart & Find the Savings Rate you need to hit your goal.*

I can't claim credit for this but it's a super simple way to understand the Savings Rate to Retirement relationship. Of course, there are some conservative assumptions (listed above the chart) and I would say they are reasonable for most people.

http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

*3. Apply the Savings Rate needed to your Income & Determine the spots you need to invest.*

So for example, if you need a 25% savings rate, and you make $50K per year NET, then you need to save $12.5K per year in after tax $$. If this is above your Max RRSP (18% of your income) and your max TFSA ($5500 this year) combined, then you need to look at investments outside your registered accounts. 

If it's below, then you need to choose the mix of RRSP & TFSA. 
*
4. Choose which Account you will focus on First.*

The choice of which to max, and which to put less into is mainly about what you're going to do with any possible tax return. 

If you plan on using the tax return that you get because you made RRSP contributions for making MORE RRSP contributions then you should focus on your RRSP's. If you're going to spend it on a flat screen, or even pay off debt with it, then go with TFSA's. This is because TFSA's are not taxed on withdrawals, but RRSP's are. However, by reinvesting the tax break you get now, you negate and hopefully overcome that end taxation. 

Also, as you near the end of your life you'll want to systematically move them from RRSP's to TFSA's to avoid losing a large portion of your RRSP to taxes in the year you die. Of course, if you're like me and the idea of giving up to 1/2 of your money to the gov't when you die makes you want to hurt someone badly, then feel free to ignore everything above and simply start with your TFSA.

*5. Fill up One, and then fill the other one up to your savings rate and then quit.*

Going back to the example - if you're savings rate is 25% of 50K net, then you need to save $12.5K per year - and assume you hate paying taxes...even when you're dead, then you're going to max your TFSA first. That's $5500, so now you only have $7000 left to go. 

Now this is where it gets a bit tricky because RRSP's give the tax break, and then tax you on the way out - what you need is $7000 in after tax money COMING OUT, so if you are spending your RRSP tax Return, then you need to put in $7000 x (1+ your Tax Rate) - say you're at 20% tax rate, you need to put in $7000 x 1.2=$8400. 

However if you're going to re-invest your tax return, then just dropping $7000 of after tax money will work just fine. 

Either way, the system is simple - Decide how long you want this to go on for, find the savings rate, start saving that amount and invest it in one of the 2 accounts. 

*6. Take a vacation - *

Because in X number of years, you'll have investments that are going to last you your lifetime, paying you the same income that you're living on now.


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## OnlyMyOpinion (Sep 1, 2013)

daledegagne said:


> @Techcrium you started an awesome thread. Sounds like a lot of people have difficulty maxing them both. But are you sure you NEED to max both? How much do you need for retirement? How far away is that? Do you know?


Dale - thanks for the suggestions. A few corrections though. You mention the 2015 TSFA limit is $5500, but those awake in the past week know that it was just raised to $10000. The MMM graph you link to assumes a 5% real ror and a 4% withdrawl rate. We might be able to average 5%, but we know that RRSP withdrawl rates are prescribed and do not stay at 4%. We also know that you will pay tax on your RRSP withdrawls no matter how/when you withdraw them. The only variable is your marginal tax rate when you do so. There are a few other assumptions that could be discussed but I'd get too long-winded.
In short - great ideas. Good to be thinking in the direction you are. A few additional details to consider


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## CalgaryPotato (Mar 7, 2015)

Guban said:


> What doesn't make sense is that if they think they have too much money, they can retire and stop the RRSP contributions far sooner. Wouldn't most people agree that if they are nearing getting too wealthy, they at least have the option of walking away from employment?


I'm not necessarily saying it's a problem to have too much money and the ability to retire earlier. What I'm saying is that those who are acting like everyone who doesn't have both their RRSPs and TFSAs maxed are going to hell in a hand basket during retirement are being silly. If someone uses their RRSP room consistently and has a balanced investment strategy they'll retire just fine. Most don't even need that much!

It's a bank marketing strategy at that point, it's the same as all those RESP campaigns that base everything off of the student living on their own in a new city.


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## none (Jan 15, 2013)

I think the point of the question was to get at whether the TFSA increase was more likely to benefit the rich. If CMF people can't max out both do average canadian have a chance?

The answer is no. The TFSA expansion is a blatant hand out to the rich with a few outliers that also happen to benefit.


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## CalgaryPotato (Mar 7, 2015)

Except for the fact that you don't have to have your RRSP maxed before using your TFSA. For the lower income earners, and probably many small business owners, there could be major advantages to putting your money into a TFSA rather than an RRSP. I'm talking for young people starting now, it won't make that much difference for people close to retirement already.

But for a young person in a lower tax bracket, they will be better off putting their money into the TFSA, and then being able to collect full benefits as they take it out as non taxable income at whatever rate they want when they are older.


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## none (Jan 15, 2013)

^ Exactly, and that's why yearly TFSA and RRSP contribution room should be linked.


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## Plugging Along (Jan 3, 2011)

none said:


> I think the point of the question was to get at whether the TFSA increase was more likely to benefit the rich. If CMF people can't max out both do average canadian have a chance?
> 
> The answer is no. The TFSA expansion is a blatant hand out to the rich with a few outliers that also happen to benefit.


Not necessarily. 

For this year, we will benefit from the TFSA more than the RRSP because my spouse is in a lower income this year.


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## Eclectic12 (Oct 20, 2010)

CalgaryPotato said:


> ... I'm talking for young people starting now, it won't make that much difference for people close to retirement already...


I'm not so sure how true this is ... where one is riding close to the OAS limit - isn't the ability to switch immediately from income to tax free - keeping one's overall income flat a benefit?

If there's no additional TFSA contribution room, those doing "in-kind" RRSP withdrawals (especially for eligible dividend paying investments) would have to keep it taxable, driving up one's income.


Cheers


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## CalgaryPotato (Mar 7, 2015)

none said:


> ^ Exactly, and that's why yearly TFSA and RRSP contribution room should be linked.


In theory I don't mind the idea, could be tough to put into practice though. If it was say 20% of your net income into any combination of the two, the TFSA would be in theory a bigger contribution room, because it would be 20% after tax dollars.


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## none (Jan 15, 2013)

Yes, you'd have to even them up somehow. Assuming a 40% tax bracket you could be allowed 20K of TFSA or 28K RRSP or some combination thereof. I don't think it would be that difficult to work out though. I think it's a good idea at least. It certainly would be a lot more fair.


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## OnlyMyOpinion (Sep 1, 2013)

Yikes, our gov'ts seem to thrive on complexity (hmm, could it be self-preservation?). Why can't life stay simple - the 3-legged stool of CPP, your own tax-sheltered RRSP, and OAS/GIS in the instance where you have lesser means for whatever reason. The old defunct $1000 tax free interest credit also seemed a reasonable inducement to save some emergency funds without seeing them taxed away. The TSFA is an added recent wrinkle and linking it and the RRSP would seem to be stepping deeper into doodoo. I guess I'm a fan of KISS (not the music group)


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## gladaki (Feb 23, 2014)

I will be maxing out my RRSP this year (I wan to use HBP from it later), also TFSA is only 10% of limit. But, This year will be making it 50%


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## peterk (May 16, 2010)

none said:


> Yes, you'd have to even them up somehow. Assuming a 40% tax bracket you could be allowed 20K of TFSA or 28K RRSP *or some combination *thereof. I don't think *it would be that difficult to work out *though. I think it's a good idea at least. It certainly would be a lot more fair.


Ha! People could _barely_ understand how a TFSA worked, and there were thousands of dummies misusing it to deposit and withdraw money regularly. You want someone to keep track of a variable RRSP contribution limit that is both dependent on how much they earn and how much TFSA deposit they've made at any given time? Good luck! (Like the idea though. But it ain't simple)


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## none (Jan 15, 2013)

I think it would be an easy online calculator. You get your annual contribution limit of say 20K

You type in your RRSP contrition and it tells you how much you can put into your TFSA... That doesn't sound too hard to me.

Then again, I know I'm in a bubble so maybe you're correct.


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## gibor365 (Apr 1, 2011)

What I personally don't like about TFSA is flexibility ..... I can withdraw $ during the year, but can re-use this available contribution room only Jan 1 next year


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## Eclectic12 (Oct 20, 2010)

none said:


> I think it would be an easy online calculator...


It is simple ... but so was reading from the TFSA web site in Mar 2009 that withdrawals would become fresh contribution room the following year. Yet I've had many people post that it was not on the web site. Or today, despite knowing the bank has a "this will be considered a TFSA contribution, make sure you have TFSA contribution room for it" notice has been around for years ... people try to tell me it isn't there (in bold text, with a bright yellow background).


Cheers


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## bgc_fan (Apr 5, 2009)

gibor said:


> What I personally don't like about TFSA is flexibility ..... I can withdraw $ during the year, but can re-use this available contribution room only Jan 1 next year


It's a lot more flexible than RRSP where withdrawal means that you lose the contribution room.

All and all the TFSA is a nice addition to the RRSP alternative and is pretty flexible if you ask me.


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## daledegagne (Apr 6, 2015)

OnlyMyOpinion said:


> Dale - thanks for the suggestions. A few corrections though. You mention the 2015 TSFA limit is $5500, but those awake in the past week know that it was just raised to $10000. The MMM graph you link to assumes a 5% real ror and a 4% withdrawl rate. We might be able to average 5%, but we know that RRSP withdrawl rates are prescribed and do not stay at 4%. We also know that you will pay tax on your RRSP withdrawls no matter how/when you withdraw them. The only variable is your marginal tax rate when you do so. There are a few other assumptions that could be discussed but I'd get too long-winded.
> In short - great ideas. Good to be thinking in the direction you are. A few additional details to consider


To be honest, I knew this was potentially in the pipe, but I didn't know that it had come down. I'm currently living in Thailand so I'm slow on these changes sometimes. Thanks for the update. This is really great news in my opinion.

As for the chart - I know it's simplified and assumptions are all over the place. Assumptions facilitate simplicity....at the risk of varying inaccuracy.

As for the prescribed rate of withdrawal, you'll have to point that out to me. There is a prescribed rate for RIFF's but not RRSP's as far as I'm aware. Or was that what you were referring to since they are required to be converted? Besides, other than slight tax implications for possibly larger than 4% withdrawals, that money can simply go in a TFSA if you have room (more chance of that now eh!) or a CD, if you wish until you need it. 

Like you had said - assumptions....

And yes, RRSP's incur tax when you withdraw them - I didn't realize I wasn't clear on that.


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