Retirement Savings, Rrsp Savings For Financial Freedom

Copyright 2006 AAA Consumer Credit Solutions
The Retirement Savings, freedom savings, or RRSP Season is here
You must act before March 1, 2006 to get yourself a Tax
Deduction and a Tax Refund Cheque Most people understand
financial freedom as an RRSP Contribution Believe me, the RRSP
Contribution is indeed the first step It can be equated to
Grade I in the Grade XII school system Then our Mortgage
Freedom and our insurance Investing would be equated to
University and Graduate School education in finances In every
venture, one must start somewhere Let’s focus on the basics in
this RRSP fast tract to mortgage freedom
The Bank Teller will give you the basic $100000 to $400000
yearly RRSP contribution The loan, must be repaid in one year
There is no planning here But this is what everyone does With
an additional $200 to $40000 per month repayment on the RRSP
loan, we struggle for one or maybe two years with this plan Our
finances are jammed, stuck We find it too hard So we give up
This savings thing does not work!!
An alternate savings plan, favored by those who preach no loans
is to have payroll deductions such as the Canada Savings Bonds
Plan As ambitious Savers, we would agree to a $200 or $300
dollar pay roll deduction from each pay cheque We would try
this for a few years Then, after the first real, family
emergency, we are stuck once again The take home pay is not
enough We give up We must find something better So we go
searching and we find new plans The RRSP Catch-up Contribution
Loan is the next stop on our road to freedom savings
The idea of the Catch-up Contribution loan is to find a lender
who will allow a $10,000 to $25,00000 RRSP “Catch up
Contribution Loan With this plan, your savings start with a
more respectable Retirement or RRSP Investment Let’s say
$20,00000 We get a Tax Receipt and a huge Tax Refund cheque,
of let’s say $700000 or $8,00000, whatever our marginal tax
rate is Usually, we are so delighted with this unexpected
windfall, we spend it ENJOY NOW !! Forget the future!!
Let me explain the catch up retirement savings contribution
idea What we refer to here is the amount of money the IRS or
Revenue Canada allows everyone to contribute to a 40K or an
RRSP The formula is spelled out by CRA rules as a example
dictated by the Canadian finance department Simplified, these
rules allow about 18% of your income from the previous year to
be contributed as retirement savings or an RRSP to a maximum of
$16,500 for this year, 2006 If you missed an RRSP contribution
for any one year, then CRA keeps a running tab of your unused
Retirement Savings contributions They report your “Unused
Contribution Room” every year in replying to your Income Tax
Returns Most people ignore that portion of the NOTICE OF
ASSESSMENT as the document is called here But it is very
important in that it tells how much savings you could contribute
to a retirement nest egg if only you could find the money
The good news is that a good Financial Advisor would find you
that money Lenders compete to offer RRSP and Investment Loans
at unbelievable rates These bargain rates start as low as PRIME
MINUS ONE PERCENT This is only one example of numerous takes on
the same theme With an experienced Advisor, you’ll receive
University level if not graduate level advice to follow You
could pay the same $200 to $250 each month on a savings or RRSP
loan and control a $20,00000 Retirement Savings or RRSP
Investment Compare this to the Bank’s usual savings plan where
your $400000 RRSP contribution must be repaid in One Year at a
monthly loan repayment amount upward of $30000 every month
Your freedom investment, a minute $400000
Mortgage Freedom techniques and the Smart mortgage Action Guide
show more sophisticated, university level strategies Time does
not allow long and detailed explanations which are found at the
blog: http://wwwmortgagemoneyletterblogspotcom Simply
stated, these plans start with access to your home equity in a
Smart Early Mortgage Repayment Plan Because of the access to
excess cash, perhaps as a draw from the home equity, perhaps
from the line of Credit, we simply make another huge RRSP
Contribution from an RRSP Loan You must understand that these
loans are extremely easy to get This is the time when most of
the lending rules are thrown out the window Bad Credit no
problem Ratios too high, no problem! No job No problem In
fact just last year, one Lender would approve everyone who
signed their application for a maximum of $13,50000 RRSP loan
Unfortunately this program was abused Many Borrowers took the
loan, the tax deduction and the tax refund cheque, then refused
to repay the loan When faced with those hassles, the company
gave up They ended the program Yes indeed This was too good
to be true So the Broke Folks made it so It was too good So,
it is no longer true The program was shut down This was a good
program that lasted at least TEN YEARS
Statistics never lie 90 % of those who retire, retire broke
Or, they must continue to look for financial support during
retirement When you find that your plan is identical to the
plan of everyone else, then for sure, you are on your way to
meeting those statistics
Good news rests with the 10% who step forward to get their
EXISTING ,MORTGAGE SMARTENED with SMERP, The Smart mortgage
Early Repayment Plan The Plan, explained in the SMERP Action
Guide, pays the mortgage off in half the time with savings above
$250,00000

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