It’s been 60 years since the RRSP was introduced as a retirement savings tool.
But that doesn’t mean Canadians have learned all the lessons of the past. Here’s a look at five common mistakes investors make with their RRSPs:
1. Dipping into the funds:
Carol Bezaire, the vice-president of tax, estate and strategic philanthropy at Mackenzie Investments, says the No. 1 blunder is dipping into an RRSP for expenses other than retirement income.
“People are making random withdrawals out of it for vacation or whatever,” she says. “And what they end up with in April is an unexpected tax bill.”
Financial institutions withhold some of the withdrawal — between five and 30 per cent depending on the province and total sum — and, depending on a person’s…