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Why taking out a loan for your
RSP contribution may make sense

Strategic use of credit can help you get ahead, by getting money into your RSP sooner.

Over the long term, the benefits of deferring taxes and earning compound interest may far outweigh the interest cost of using a loan or line of credit to contribute to your RSP.

For example, say you skip an RSP contribution of $1,000 when you are 29 and don’t make it up in a future year. By the time you are 69, your RSP will be worth $7,040 less, assuming an average annual rate of return of 5%.

Tips for making it work:

  • Before you make arrangements, be sure you have enough income to repay the loan.
  • If your contribution triggers a tax refund, use it to pay down the loan or line of credit and reduce your cost of borrowing.

Apply online today for an RSP loan.

A strategy to give your retirement savings a boost.

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