By Gordon Powers February 09, 2008
Despite stiff tax penalties, many Canadians are dipping into their RRSPs early to invest in homes, pay down debt and cover living expenses, Bank of Nova Scotia data suggests. And most of those have no real plan to pay it back.
Among those who've made the plunge, the average amount withdrawn was $18,000 -- a move, for some people at least, that's going to prove quite costly.
Had they left that $18,000 invested at, say 5%, it would have grown and compounded on a tax-deferred basis to roughly $61,000 over 25 years. That's a loss of $43,000 in potential investment gain.
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