RRSPs & First Time Home Buyer’s Plan
The other day, an acquaintance from college sent me an e-mail and asked for my advice regarding her RRSPs. She said she lost all of the money she contributed in 2008 and was feeling depressed. She knew she wasn’t supposed to cash her RRSPs out, but she was panicking about losing so much money, so fast. She wanted my advice about what to do.
I’m not sure how she got the impression that I would know anything about RRSPs, let alone be able to give her advice, but I answered her questions and told her what I thought. I tried to reassure her – and reminded her that she wouldn’t be needing her RRSPs for another 40 years – plenty of time for the market to recover – and a great time for her to keep investing and pouring money into her retirement portfolio while everything is cheap.
Now that Canadians can take $25,000 out of RRSPs for the First Time Home Buyer’s Plan (instead of $20,000), I want to make sure that I hit the $25k mark before I go traveling.
But I was wondering, is it $25k of contributed money, or $25k of the portfolio’s current value? Let’s say I’ve contributed $25k into my RRSPs, but b/c of the stock market, the value is only at $23k. Does that mean I can only use $23k?
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In Hindsight this was great advice, markets have recovered and if your friend poured money into the markets she would have been in a great position today. Many canadians dumped their investments at this time, locking in their loses.
In Hindsight this was great advice, markets have recovered and if your friend poured money into the markets she would have been in a great position today. Many canadians dumped their investments at this time, locking in their loses.