7150 Hawthorne Dr. Unit 104
Windsor, ON, N8T 3N3
Phone: (519) 974-6688
Toll Free: +1 866-973-4846
Fax: (519) 974-7192
Borrowing to maximize your RRSP contribution usually leaves you further ahead than making a smaller contribution without a loan. Even though interest on an RRSP loan is not tax deductible, the combination of low borrowing rates and paying off the RRSP loan within one year will result in more total assets.
For example, if you take out an RRSP loan of $5,000 to increase your total contribution to $10,000, after one year you will wind up with $10,425 in total assets versus $7,721 in the "no loan" case - a $2,705 advantage.
This assumes you are in the 46.41% tax bracket the RRSP grows at 8.00% per year and you pay 8.00% in loan interest. This also assumes that you use the $4,641 tax refund to pay down the loan as soon as it is received.
The contents of this website do not constitute an offer or solicitation for residents in the United States or in any other jurisdiction where either Seguin Financial Group and/ or Sterling Mutuals is not registered or permitted to conduct business. Mutual funds provided through Sterling Mutuals Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus carefully before investing. Mutual funds are not guaranteed, their values fluctuate frequently, and past performance may not be repeated.
Insurance products, and other related financial services are provided by Seguin Financial Group as independent insurance agents, and are not the business of, or monitored by Sterling Mutuals Inc.
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