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So, I've decided to finally start planning for retirement, but am unsure what to do.. RRSP? GIC? BONDS? GAMBLE? (lol). I bank with Royal Bank and would be starting off stashing away approximately $500 per month. I would want to "drain" the account after 5-10 years to purchase our permanent home. I would then start saving it again for retirement. Can anyone please let me know what their experience has been with RBC?
I would consider a TFSA if you're going to take the money out soon. There's no obligation or deadline to pay it back, and you're on your own schedule if you do.
When I first began investing in an RRSP, I did it with my home bank (CIBC) and took it out for a deposit on our forever home. Taking the RRSP out of CIBC and putting it elsewhere was the best financial decision of my life. Most banks I know have ridiculous management fees and CIBC would have charged me to transfer it to another bank. Just paying the RRSP back somewhere else was completely free.
I've been banking with CIBC for two decades, also with RBC for two decades (accounts now closed). Currently, neither of them are competitive with what is offered elsewhere for what I need (retirement growth).
To reinforce a couple of thing sweet sparrow said, unless your situation is pretty unusual, it's probably not a good idea to put money into an RRSP with the intention of withdrawing it before you actually retire. I'm no financial planner, but basically, RRSPs exist to let people defer taxes on part of our income during our high-earning years until later in our lives when we earn less. They're not intended to support taking out a large lump sum before retirement, so essentially, it's not a tool designed for what you want to do.
Second, the big 5 banks seldom if ever provide the return you can get elsewhere just as safely by dealing with smaller banks where your money still has the same protection (e.g. CDIC for deposits). The difference may not seem like much, but over many years, even a fraction of 1% can compound into a pretty meaningful amount of money.
And to add a third consideration, you should consider how much risk you're willing to take within the context of your overall life situation. As just one simplified generalization, the younger you are, the more risk you can afford to take because if things go poorly, you still have a long time before retirement in which to recover. Otoh, those who are close to retirement or already retired are generally better served to be much more conservative and to lock in smaller but safer returns.
Thank you both for your insight! I am not young, but not old either.. I will be turning 44 this year and have 2 jobs that I can actually keep beyond retirement age.. I'm a full time waitress and part time bartender. I am currently paying off an old debt at the rate of $500 per month. It will have been 4 years of those payments next May when it's paid off. I figure, I've gone that long without that $500 per month, then why not stash that for retirement? Also, Hubby and I would like to purchase a mobile home/ trailer and live in a park year round. That would be the big withdrawal in 5-10 years. It's never too late to start saving money, I just don't know the best way to go.
True, it's never too late to start saving. Congratulations on being able to start. Why don't you do a bit of reading before you decide where you want to put your money? I find some of the self-directed routes are just as much work as putting it in with a bank salesperson. Generally, you decide where to park it once, decide what percentage you want to put where, and let it go. Check on it once a year and don't take on too much risk that it keeps you awake at night.
There are lots of different places to begin reading, depending on your interest level on how involved you want to be. At the most basic level is something like the Tangerine index funds, which are about the maximum laziness level I could find. DH has some money there as he wasn't able to make it to the bank one year. I just moved his money in five minutes just before 12 AM on the last day. They take 1 point-something percent as a management fee, which is miles better, and a million times faster than hearing the bank try to persuade you on where they want to park your money.
If you're less lazy, there's lots of other options. You can google index investing or couch potato portfolio.
Use rrsps... you get the tax deduction and you can use it for the home buyers plan. First time buy only.
Then you pay it back in installments over 15 yr period.
I have RRSP with RBC and yes they are fine.
My RRSP are through RBC and they are great. I would suggest when you go to speak to them tell them your intentions as they will factor that into how they invest your money. My brother was in this situation he was looking to buy a house within a year to two and they based his investments on this.
Every year when we need to invest our new investments or reinvest matured investments they always re confirm what our goals are including since I co own a house asking me if I will need money to buy my first house alone.
You might like to look ahead at the upcoming June service changes and fees at RBC.
http://www.rbcroyalbank.com/servicef...ges/index.html
The bank also issued a security alert that its online banking supports the browsers that meet TLS 1.2 standard.
https://www.rbcroyalbank.com/onlineb...s-browser.html
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