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.

young adultsNever hesitate to ask for advice in any event, and give all the facts to your advisor, it helps make informed decisions!!