Should I contribute to a RRSP or pay down my mortgage?

Should I contribute to a RRSP or pay down my mortgage? (2 min 08 s)

Added on November 27, 2015

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People often ask whether itís better to pay down their mortgage or save with financial tools such as RRSPs, RESPs and TFSAs. Paying off debt versus investing is a pertinent question to ask yourself when managing your finances.

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Should I contribute to a RRSP or pay down my mortgage? (2 min 08 s)

Added on November 27, 2015

People often ask whether itís better to pay down their mortgage or save with financial tools such as RRSPs, RESPs and TFSAs.

Everyoneís financial situation is different, so thereís not just one right answer.

That being said, paying off debt versus investing is a pertinent question to ask yourself when managing your finances.

Thatís why you need the Desjardins Financial Plan to set your short-, medium- and long-term objectives. Then, your Desjardins advisor can analyze your situation to help you identify your priorities and implement strategies for now and for later.

Letís have a look at a few different plans, their selling points and most of all when we should use them for best results!

So interest rates are low at the momentóit could still be beneficial to ramp up your mortgage payments.

Start by comparing your mortgageís interest rate with the rate of return on your investments and projected tax results.

When it comes to RRSPs, the higher your tax rate, the better your tax deduction. This deduction often translates into a tax return, which you could use to pay your mortgage. Kill two birds with one stone!

If you have any children under 17, RESPs and government grants are definitely something to consider.

TFSAs are your best bet for short- and long-term projects since withdrawals are tax exempt. TFSAs donít get you tax deductions, but they can be a great way to save for your retirement, especially if youíve used up all your RRSP contribution room.

As you can see, thereís no silver-bullet solution. Your family situation, income, age and objectives are all important factors to consider when planning for your financial future.

With the Desjardins Financial Plan, you can find the right strategies to optimize your financesÖfor today and tomorrow!

If you have any questions, please feel free to send them to the address you see on-screen. I look forward to hearing from you!