RRSP Loan: does it make sense for me?
I'm pretty much done preparing my taxes and I was playing around with the RRSP amount, and noticed that if I contribute 5k to my RRSP I will increase my refund by $2,050 (41%). I do have the contribution room, BUT based on the curent value of my portfolio, my yearly contributions to my DCPP RPP I should be set for retirement. I do not have the extra 5K at the moment, would it make sense for me to get an RRSP loan at prime + 0.5% (3.20% currently) and must be paid back within 2 years, for someone in my situation?
I was thinking that it would because I am in a high tax bracket now (higher than i would be upon retirement). and basically getting a 38% return on the loan now + the compounding. I also have a bit of dilemma on the refund aspect, should i use the additional refund and pay down credit card debt (19.9%) or put it against the RRSP loan?
Any thoughts would be helpful, also can I get a better rate than prime + 0.5% on an RRSP loan?
I was thinking that it would because I am in a high tax bracket now (higher than i would be upon retirement). and basically getting a 38% return on the loan now + the compounding. I also have a bit of dilemma on the refund aspect, should i use the additional refund and pay down credit card debt (19.9%) or put it against the RRSP loan?
Any thoughts would be helpful, also can I get a better rate than prime + 0.5% on an RRSP loan?