Way back when, I had talked about how one can use the RRSP for the Home Buyers Plan.  Having bought my first home recently, I found the home buyers plan information on the Canada Revenue Agency website a bit difficult to understand (must be all that government lingo), so I thought I would simplify it in easy to understand terms and spell it out step by step on how take advantage of the HBP.

First off, in case you haven’t heard of the Home Buyers Plan, I’ll try to explain it.

It’s where a first time home buyer (you and whoever you buy the home with) can each withdraw up to $25,000 from your RRSP tax-free.  The caveat is that you have to repay it within 15 years, following the second year after the home is bought.

e.g. if you buy the home in 2010, you will have to start repaying the Home Buyers Plan withdrawal in 2012.

Conditions in order to be eligible for the HBP plan:

(more…)

Comment on this post »

HBP: home buyer’s plan

This is another “bonus” for RRSP’s. I think I would definitely take advantage of it, if you have that much money saved up in your RRSP’s.

(more…)

Comment on this post »

Okay, what are they? To clarify, they are not mutual funds, but they can HOLD mutual funds. They are akin to the States’ 401 K.

Think of it as a grocery basket. Mutual funds, GIC’s (guaranteed income certificates), stocks, bonds all go into this grocery basket.

A non-registered account is like another grocery basket that holds the same items, BUT the downside is that any income you make on it is fully taxed.

I know I know, you’re thinking “hey but I’m only 24, why the heck do I need to think about retirement?? You may not be thinking about retirement now, per se, but you can start thinking about buying a home (Home Buyer’s Plan) OR going back to school (Lifelong learning Plan) in which case you can withdraw $25,000 from your RRSP for FREE- as long as you pay it back within 15 years (we’ll talk more about this later– stay tuned).

(more…)

Comment on this post »