Why saving outside a tax shelter is futile

By Jonathan Chevreau on November 12, 2012
Estimated reading time: 1 minute

Most investors are lucky to break even investing outside RRSPs or TFSAs, according to Mercer actuary Malcolm Hamilton.

Long before the Tax Free Savings Account was created in 2009, Mercer actuary Malcolm Hamilton used to tell journalists like myself that “investing outside tax shelters is futile.” Has the TFSA changed his view? As you can hear on this audio podcast, not really. After taxes, fees and inflation, most investors will be “lucky to break even” investing outside RRSPs or TFSAs, Hamilton says. However, for those who have filled their tax shelters, non-registered investing may be the only game in town, he concedes, even if it just means a slow “gradually controlled” loss of purchasing power. If you must invest outside tax shelters, do so not with highly taxed interest-bearing investments but with equities, he adds. And what about the special case of business owners and real estate investors? Click on the link for that: [mp3j track=”https://www.moneysense.ca/wp-content/uploads/2012/10/Why-saving-outside-a-tax-shelter-is-futile.mp3|titles=Why saving outside a tax shelter is futile”]

About Jonathan Chevreau

As MoneySense’s Investing-Editor-at-Large, he is also author of Findependence Day and co-author of Victory Lap Retirement. Reach him at [email protected], where he is the founder of Financial Independence Hub.