G&M: RRSPs are getting a bum rap as a tax trap

[dreamer88]

@davetownsend I dunno about significant drop vs when working.

Theoretically no mortgage payments (or even downsizing). No need to commute, buy work clothes, do all of the other things that cost a shit load of money in order to be able to work.

Senior discounts (which should be bloody banned... IMHO), freebies, etc, etc.

I don't want to get old(er). But there are perks. And a decreased cost of living goes with the decreased income.

I only realised a few days ago, you even get a slightly larger/additional personal allowance when you're old.

 

[kaza125]

@mtainmn43 The article does not look into the Marginal Effective Tax Rate (METR or MTR) including reduced government benefits and clawbacks that seniors incur. With healthy RRSP income, your tax rate can soar to 70% for people with 80k of income (CPP, OAS, RRSP, pension, etc...)

When considering if you are going to retire at a lower tax bracket, take a look at the Marginal Effective Tax Rate expected when you are a senior.