My husband’s fabulous brother and niece are visiting this week. At breakfast this morning the conversation gravitated to RRSPs. Our niece said that she had RRSP funds invested at very low risk. I pointed out that since she is so far from retirement, she could focus more on growth and have mostly equities in her portfolio. She then asked, “even if I want to use the RRSP for the homebuyers Plan?”
Excellent question!! Since she is planning to buy her first home within 2 to 5 years, she should not invest the funds. They should go to a risk-free high interest saving RRSP account or a very low volatility fund. Only her “long-term RRSP” should indeed be invested in mostly equities. I also added that she should really have two RRSPs, one that is for Long-term growth and retirement, and another one that is short-term for the home buyers plan. Of course, she instinctively knew that because she is very smart and good with money.