Leto

So, my SO & I are getting ready to download the (free) online tax package and plug in our current 2010 details. This is all with the aim at deciding how much $ we need to put into a Registered Retirement Savings Plan (RRSP) (or 401K is what I think Americans call this vehicle) to shelter as much of it from the tax man as possible.

Usually I am late with this as the deadline is the end of February and I end up sending all my bonus money into a Money Market fund. Way too conservative, although it's saved my savings in the past few years.

I've heard that the percentage of people who put into retirement plans is low. I've managed to max out each year that I can. My question is, how many folks on TFP think about this, what are your strategies? I know all the H&R Block commercials will start soon - it usually happens after The Mandarin Restaurant finishes it Chinese New Year commercials.

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http://dune.wikia.com/wiki/Leto_Atreides_I

Baraka_Guru

I don't have a retirement plan. I'm one of those "retirement plans are for rich people" kind of guys. I'll use any tax return money to put towards paying down my debt.

As for strategies, in Canada, the optimal thing to do (as always) is to max out your RRSP contribution and your TFSA allowance. Do that first above all else. Everything else is gravy. (That is, unless you have too much high-interest debt.)

Always look into spousal benefits in the RRSP plan. It might benefit many to just go to a tax accountant to ensure you max your tax efficiency. The rules are always changing.

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Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

Jinn

I did my taxes a week ago on the free Turbotax dealie online.. ended up getting a grand back. It's a nice little "YAY! NEW TV!~" bonus, but at the same time I know it would've probably been better served for me to have this money over the year. I'm wavering between upgrading one of our TVs from a 42" to a 55" or throwing this into a new IRA.. my 401k is already maxxed out for the year.

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snowy

I did my taxes last week through TurboTax, already got my return back. We don't have a retirement plan as of yet; we're not in a position to be socking away that much money. Instead, our return (which was very good thanks to the Making Work Pay and learning credits) is going into savings, to be meted out over the next couple months while my husband is unemployed, so that we don't have to rely on parental help.

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LordEden

My taxes are usually pretty painless, but this year I'm going to try and write off my move as a "job related move". Hopefully that means more money.

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Jove

I put the money in a savings account until I decide to purchase some form of gadget, but this year might go towards traveling expenses.

bagatelle

I hate this time of the year... even though we have computer program for doing taxes and it's not a huge task, it's not pleasant to figure out what we're suppose to do.

I have some extra retirement savings plan, but I doubt it's a very wise thing to have. I took it because I have mostly temporary jobs and retirement money based on them will be lower.

Do you have the retirement funds as part of your salaries, like we do, or do you pay everything voluntarily?

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Charlatan

Even if you are only putting away a few dollars here and there, start planning for your retirement now. Compound interest is your friend.

I wish someone had told me this when I was in my 20s. I could have put away $50-$100 a month. It would be worth a heck of a lot more some 20 years later and wouldn't have been *that* painful. Now, I have a lot of catching up to do to make sure I have something for retirement.

Seriously, do not put it off.

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Baraka_Guru

Right now? Compound interest is my enemy.

I'm better off putting a $500 monthly payment on my debts that range between 8% and 19.5% than I am into a portfolio that would, if I'm lucky, earn between 6% and 8%.

In cases like mine, it's better to clear bad debts as a priority until such a time that tax-deferred investments appear to have a better bang for the buck.

It's a matter of measuring potential interest earnings vs. reducing interest expense.

Always ask where the money is best placed.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

Charlatan

BG... in your case, I would agree. Credit card debt sucks (I am assuming that's what you have). Have you spoken to the bank about taking out a lower interest loan from them to pay off your card(s)?

I did that a few years ago when I had a lot of debt. It helped make it go away faster.

__________________
"My hands are on fire. Hands are on fire. Ain't got no more time for all you charlatans and liars."
- Old Man Luedecke

Baraka_Guru

Yeah, I've already done that. Now it's just about hunkering down until the worst of it is gone. I'll be in a much better position in a year or two.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

Plan9

Wow, now I'm really glad you Canadians have gummint healthcare... doesn't look like you have a whole lot of money to play around with should something bad happen. On the other hand, my entire life savings would be wiped out by the ER bill for an automobile collision. Disgusting.

I'm one of those crazy guys that somehow managed to make it through his 20s without forming a giant abscess of debt. Between the military paying for college and the fact I only buy used vehicles and eat tuna and Cheerios constantly, I'm putting away $5k a year into a Roth IRA and have a separate money market account that I throw several thousand a year into so I can eventually put a huge down payment on a house. Aside from the huge hit I took in 2007 (along with everybody else), I'm well on my way into being a millionaire by the time I retire... which is good because "millionaire" won't mean diddly-shit in 2040. As stupid as I am, I seem to be doing well in the money department. I used to get tax refunds but that seems like a thing of the past. I mean, I didn't realize why everybody was bitching about taxes until I entered one of the higher tax brackets. I'm losing a third of each paycheck now. Time to revert to Full On Greedy White Guy mode and hire somebody to find loopholes to funnel cash through back to my pockets.

My strategy to get money back this year? The American Way: Find every single write-off I can and milk the hell outta the weaknesses of the system.

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Lindy

I find it sad that we have been conditioned to think of ourselves as being "greedy" when all we want to do is keep more of our own money.

Lindy

Lucifer

I'm in the same position as B_G, I even cashed in my RRSP to help pay down the debt, cause at the moment, getting rid of the debt is more important than saving for retirement. Thankfully, through the help of a Credit Counseling Service, I managed to consolidate everything to a convenient, if steep, monthly payment with little or no interest in most cases. I've been paying it down for the past 2 years, and will become debt-free this year! Then it's open RRSP/TFSA and start socking it away for retirement, cause like Charlatan, I didn't worry about this in my 20's/30's (too busy seeing the world from the decks of ships) and now it's looming over my head.

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