This is an excellent book that should be read by all Canadians who are interested in saving for retirement. Offering practical and straightforward advice, David Trahair tackles several myths that are put forward by the financial industry. Among the most important is the ubiquitous mantra that you should: a) start making RRSP contributions as young as possible; and b) maximize your contributions throughout your life. However, as convincingly argued out in the book, this strategy has important financial consequences that could actually cost you money by the time you retire. That is why instead of maximizing your RRSPs, the author advocates a strategy of optimization,
i.e. calculate the right amount of money that you should put away in RRSPs, and then use the rest to pay down such things as consumer debt.
Another good section of the book explains why tax shelters can often cause more harm than good, and why trying to escape the tax man can sometimes be counter-productive. Then there is the discussion on why you may not need as much money as you think to retire, as well as an excellent chapter on why paying down your mortgage quicker is something that all homeowners should do. Some people, the author notes, think that by cutting down on restaurants, lattes or indulgences they can add to their bottom line. In reality, paying down your mortgage faster is not only a better move economically, but it could also allow you to continue enjoying the little things in life.
With practical exercises and honest advice this book is a must read. I throuroughly enjoyed it and highly recommend it.
5 out of 5 stars
