This is the one investment every Canadian who qualifies should take full advantage of.

I am passionate about managing your money and controlling debt, but I am extremely enthusiastic in encouraging everyone to take full advantage of opening a Registered Retirement Savings account.

Last week I was invited to speak to a group of ladies about RRSP. They wanted to know more about it, some of them already had one but did not know much more than the upfront tax sheltered benefits.

It’s the time of the year when information about RRSP is all over the place; on Bill Boards, Radio, TV and when you turn on computer. Everyone tells you that you have till March 1st to contribute to your RRSP to take full advantage of the tax sheltered component.

Here are two more reasons why everyone should have RRSP especially young adults just entering the workforce.


 The plan works like this; if you have contributed to your RRSP for the past number of years and you have decided to purchase you FIRST HOME the Government allows you to take a maximum of $25,000 from your RRSP and put it towards purchasing your first home.

 If you have a partner, the partner is also allowed to put up to $25,000 towards the purchase of the home with fifteen years to put the funds back.   

These funds can be used during the purchase period to put towards your down payment, to buy furniture, pay your lawyer’s fees or pizza for your friends who have helped you move.  After you have been in your home for two years you will receive a notice with your income tax forms to reinvest one fifteenth of the amount you withdrew from the RRSP. 

 If you withdrew $25,000 the amount you would need to reinvest would be $1,666.67 annually but if you did it every pay day and you are paid bi-weekly the total would be $64.10 a pay.    That is a very affordable and doable plan.

It’s a big win for you. You have just given yourself an interest-free small mortgage that will be paid off  in 15 years.




 Once you have decided to stop working and you are now depending on a reduce income, you may begin withdrawing from your RRSP to enable you to maintain a comfortable life style. Because you are now retired your tax rate will be significantly lower than when you were working.

I am sure you have all heard of someone one who is quite upset that they are now paying tax every time they withdraw from their RRSP.  Let me tell you about Violet.  I met Violet a number of years ago when I worked downtown.  Violet got on the bus a few stops after me every day on our home from work. She was older than me (she told me she was 69 years old at that time) so I would give my seat to her.  One day Violet and I were riding on the Bay bus and there was a sign about RRSP and how it was the time to do it.  There was also a table that showed that if you started investing at the age 20, stopped investing at the age of 30 but leaving the investment in place and someone else started at the age of 30 and continued investing until 65 that the person who started investing at the age of 20 would have more money than the person who started at 30 and stayed invest to the age of 65.

 I remembered so well, when Violet looked at the ad and smiled, then she looked up at me and said…

 “My dear I hope you are taking advantage of the great privilege the Government of Canada have given us to save for our retirement. You see I did not open a RRSP.  I never thought of being older and that is why today I am working at 69 years old just to make ends meet. My Canada Pension and Old Age Pension is not enough to meet all my financial needs. If only I had made that decision I would have the choice of taking a vacation during the winter or staying home and just relaxing. Please do not make the same mistake as I did.” 

I had already opened my RRSP and was happy to tell her that I had.

So now when you see and hear the ads about investing for your future and you think, “Well, I have all the time in the world” remember the old saying that TIME AND TIDES WAITS FOR NO ONE. Or better still, look at the older person sitting next to you and remember Violet.  Do you want to be the next Violet?

Tessa- Marie Shillingford is the author of Controlling the Debt Monster. She is Personal Financial Planner, with a designation from the Institute of Canadian Bankers, and a Financial Counselor certified by the institute of Canadian Banker. She is presently a Program Facilitator of Financial Literacy at JVS Toronto. Tessa- Marie was employed by TD Canada Trust for twenty years in the retail section of the bank. During her tenure at TD Canada Trust she held various positions interacting with customers of the bank. As a Financial Advisor and Manager of Financial Services she led a group of Financial Advisors in helping customers of TD Canada Trust successfully manage their finances. Details of her book… Controlling the Debt Monster, can be found at