Everyone has had the lesson about a 16 year old putting $5000 away and throught the miracle of compound interest ending up with $1000000.
So why is at good to shelter $500 worth of income today so that I can pay income tax on $5000 later?
It seems that the government has it pretty good here. They get to keep taxing you on you RRSP income until you're dead and once you're retired they say you MUST take out a certain amount every year, so that they can tax you on it....
Wouldn't it moke more sense to pay your income tax on $500 now, pay the capital gains each year on your investment earnings and say 'screw you' to the taxman when you retire?
Any financial whizzes out there?
Keep in mind I am referring to a modest income, not some rich, fat cat who wants to protect his millions.