It’s usually best to find a balance between paying your mortgage and contributing to your RRSP. Here’s why.
In a perfect world, paying off your mortgage before contributing to your RRSP would be a good thing to do. But that would call for extreme discipline.
After your last mortgage payment, you would have to keep putting the same monthly amount aside for your retirement. That’s not very realistic.[caption id="attachment_13184" align="aligncenter" width="580"] Shutterstock (Desjardins)[/caption]
Another possibility is to make substantial contributions to your RRSP before buying a home. However, a home is more than a financial investment; it’s a life choice that you don’t want to put off for too long. The RRSP that you started early could help make you a homeowner more quickly through the Home Buyers’ Plan.
That’s why it’s usually best to find a balance between paying your mortgage and contributing to your RRSP, even when RRSP returns are lower than mortgage interest rates.[……]