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Barry McFadden
11-01-2015, 11:12 AM
I know there are probably lots of members here that are retired or soon to be. I'm looking for a little information to see how other people handle their RRSP's. My situation is that I took a package from where I worked for 40 years. The deal was, I left in July 2013 and they have been paying me until September this year so this month I started my company pension. I have RRSP's of my own and I am wondering 2 things.

First: Do you continue to contribute to your RRSP's when you are on a pension or do you just let them accumulate as an investment. I tend to think that once you are retired you don't contribute anymore.

Second: What do you use them for? If you need the money for living expenses then I assume you would draw some out. If you really don't need them right now would you take some out for a new tool? (I'm eyeing a Robust lathe!) or some other indulgence. I have a feeling that if you save and save them for some emergency then you may never use them and they get passed on to your kids.

So, in a nutshell, do you use them up and enjoy a few things in your retirement or are you expected to leave them alone and possibly never get the chance to use them at all.....(you can't take it with you!!!)

Rich Riddle
11-01-2015, 11:31 AM
You are going to have a lot of folks wondering what a RRSP means because they live in the United States. There are likely some Canadian woodworkers in here who have used Registered Retirement Savings Plans.

Barry McFadden
11-01-2015, 11:42 AM
Sorry....thought they would be the same in the USA as well. An RRSP is an account that is registered with the government that you can put money into every year and on your income tax return you can claim that amount that you contributed and they refund you the income tax you paid on the amount you contributed. So if you put $5000 in and say you were in a 40% tax bracket they would refund you $2000 when you filed you income taxes. The RRSP continues to (hopefully) gain every year as an investment then later in life when your income is less and want to withdraw funds from it you pay taxes then when you may be in a lower tax bracket.

Rich Riddle
11-01-2015, 11:44 AM
Let's hope Rod Sheridan pops in for a comment. He's Canadian and works in the USA as well. He likely has experiences though he strikes me as a bit young for retirement.

Scott Donley
11-01-2015, 2:26 PM
In the states that sounds just like our IRA. Here you can only contribute money from earned income, a pension is not considered earned income, so if that is your only income, no longer can contribute. You are required to start taking some out at age 70 1/2.