Best Estate Planning Attorneys in Caledon, ON

Depending on your tax bracket, often the answer could be both. For example if you have $5,000 and you are in a 40% tax bracket, instead of just paying the $5,000 against the mortgage, you can invest it in your RRSP and then take the $2,000 tax break and use that to pay down your mortgage. Just like that you have turned a $5,000 asset into $7,000.

The two biggest concerns when it comes to drawing CPP early are the reduction in benefit and the fact that it is taxable income. If you do not need the income because you are still working and you have RRSP room available, you can contribute your payments into an RRSP, offsetting any tax consequences while significantly increasing your retirement savings. While there is a reduction for early withdrawal, it is important to remember CPP does not have a guarantee period. Therefore, if you wait until 65 or 70 to get the higher amount but pass away before collecting, your beneficiaries receive $0. There is no cut and dry answer so you should sit with a financial professional and discuss your situation before making a decision.

Plans differ from company to company. Some plans require you to keep the funds invested in the plan as long as you are working there, while others offer the ability to move the funds periodically, often annually. Most plans do allow the transfer of funds you have contributed to a personal plan on termination of your employment and, depending on the terms of the plan and how long you have worked there, the company contributions may also be available to be moved.