RRSPs - Not just for retirement!

You work hard and are investing your money in RRSPs - for retirement - but that is so far down the road, especially for someone just starting out!

There is a program called the Home Buyers Plan (HBP). The HBP allows you to take up to $25,000 out of your RRSPs to purchase your first home. There is no tax implications when you take the money out. What is the catch you ask? Well, you need to pay back your RRSP over the next 15 years. If you don't put the funds in for one year then you have to count that as income. So the basics are that you are borrowing money from yourself to purchase your first home. What a great opportunity!

There is another time you may take money out of your RRSPs tax free - it is for the Life Long Learning Plan (LLP). If you are ready for a career change and need to head back to school you can use funds from your RRSPs as well. Similar to the HBP.

So you put your hard earned money in to RRSPs. At income tax time you get a tax refund to invest into more savings... therefore speeding up your savings goals.

Contact me if you are interested in either of these plans, or you can find all the nitty gritty details are on the government web site .

Have you (or do you know of anyone) who has taken advantage of either of these plans?