RRSP to Pay Down Credit Cards

Often once you get behind on a credit card it is hard to catch back up at the often high interest rates.  In some circumstances an RRSP (Registered Retirement Savings Plan) can help. If you are making a credit card payment each month at a high interest rate, it is often close to the payment required for an RRSP loan.  Let’s say you were at a 40% tax bracket, if you were to take a $10,000 RRSP loan, you would likely get $4,000 back in taxes.  You could use the $4,000 to pay off your credit card and the RRSP loan would usually be at a much lower interest rate.  Replacing a credit card payment with a payment on an investment and wiping out the credit card debt can be a good option.

The key to any plan that involves paying off credit cards, is keeping the credit card balance at zero.

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RRSP Deadline

The 2010 RRSP deadline is March 1 2011.  If you are planning to get an RRSP (Registered Retirement Savings Plan) this year time is running out.

Investing with Values

There is no doubt many things in the world are currently broken, and it no secret that money is often a motivation for many of these issues.  When choosing where to invest your money there is an option that I like, as it fits with my values.  SRI or Socially Responsible Investing.  This option varies between the providers; however the concept remains the same.  First there is a list of areas that they will not invest.  Second they rate all companies left and have a minimum score for them qualify for investment.  Third is advocacy, where they consult, make recommendations and use shareholder rights to encourage positive change in the companies they own.  The three areas of focus are Governance, humanitarian and Environmental.

What I really like about this style of investing is they are clear on the filters, then work with the companies to make things better.  This collaborative process not only improves the company, but in most cases improves profitability.  Doing the right thing works and this process has many success stories to prove it.

SRI investing offers the ability to grow your investments, while supporting positive change in the companies you invest in.

RRSP Calculator

It is common to wonder how much difference your RRSP (Registered Retirement Savings Plan) contribution will make.  Below is a link to a great online tool that can help you plan and make sure you get the most from your money.

Tackling debt

Managing debt has become an essential in creating a strong financial future.  I have written a short eBook on how I would tackle most debt.  The link to download is below.  We encourage any feedback on any of our strategies, so please let us know how it worked for you.

Debt Repayment Guide

Vancouver RRSP Solution

We do maintain an office in Vancouver, however for many our mobile solution seems to be much more convenient.  We are happy to come to your office, home or local coffee shop.  We can offer full RRSP (Registered Retirement Savings Plan) service, RRSP loan service and a full array or solutions where you are.  No need to fight traffic or wait in lines.  Investing in your future has never been easier.

If you are interested or would like more information please call our office 604 637 7422.

Should I save my RRSP Contribution Room?

Most of us like the idea of saving on tax, so if you have the money to save in a RRSP and you have determined the tax savings are large enough to make it worthwhile, there are still a few situations where you might want to wait to make that contribution.  Below I discuss a couple of situations where even if RRSP’s make sense for you, you may want to hold off investing in an RRSP.

Expecting a buyout?  Many companies offer significant buyouts to long time employees a few years before retirement when trying to cut back staff, labor costs or shift the direction of the company.  Although a large cheque can be exciting it can also create a significant tax issue.  One simple solution to this is to take the buyout and put it in a RRSP.  With this option the deduction the RRSP creates offsets the taxes on the buyout.  As a lump sum like this will often push you into a much higher tax bracket than usual, this is often a great time to use your RRSP room to save tax, that is if you have enough RRSP room.

High income year.  If you get a bonus, or sell an asset (such as a rental house) that sends your income into a higher tax bracket than you normally would be in, this could be worth saving your RRSP room for.

Skip a low income year.  If you happen to make less one year than normal, then skipping the deduction that year may make long term sense.

When planning your finances it is important to look into the future and plan for low income years, high income years and any future financial transactions that may impact your tax situation.

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IPP versus RRSP

An IPP (Individual Pension Plan) is a tool that can replace an RRSP (Registered Retirement Savings Account) for small business owners.  So which one is better to hold your investments in?

Why consider an IPP (Individual Pension Plan).

  • As you near retirement the contribution limit is greater than that of an RRSP
  • In some circumstance IPP’s behaves differently in your estate.
  • Can be used in different tax planning strategies (Accountant is recommended to discuss these, but can include under funding to devalue a business)


Why would you not want an IPP (Individual Pension Plan)

  • Annual fees are due to maintain IPP’s
  • Many more rules and restriction than an RRSP
  • A more complicated tool to understand.


If you are considering an IPP I would recommend talking to both an investment professional that understands this tool and an Accountant that can explain the tax benefits.  These can be a great tool if understood and used in the right planning situation.

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Keeping Identity Safe Event

Identity theft is growing at an alarming rate, this event will help you decrease your vulnerability,  Join George Greenwood on,

March 2 2011

Doors open 6:30

7:00 pm to 8:30 pm

Guildford Golf & Country Club

7929 152 Street  Surrey BC

Using the RRSP “Gross up” Strategy

This is a simple strategy to increase the size of your RRSP (Registered Retirement Savings Plan) without losing more of your income to savings.  The best way to explain the concept is with an example.  To keep the math simple we will say the tax rate is 50% (please note that there is no 50% tax rate in BC, the benefit of this strategy should be calculated at your real tax rate, however for the example 50% is much easier to visualize).

Example, John makes a $4,000 RRSP contribution at our imaginary 50% tax rate.  With this he can expect to save $2,000 on his income tax.  As many put there refund back into their RRSP, the gross up strategy says he should borrow the same amount as the refund and then use the refund to pay back the loan.  This increases the tax savings now and gets the money into your account sooner, giving your money longer to earn interest.  Now if you add a $4,000 contribution and $2,000 refund together and make that your new contribution you would now get $3,000 at our 50% rate, so we need to run through this a few times until the extra tax savings no longer makes much of a difference.


Normal RRSP contribution of $4,000 would create a $2,000 tax savings

Gross up RRSP contribution of $4,000 would become $8,000, with a refund of $4000 to pay off the $4,000 loan required to make the contribution.

To see if this strategy works for you can work out the difference at your tax bracket and hopefully with this strategy you can save a little more for retirement, without having to find any extra money.

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