RE:RE:RSP DisadvantagePeople criticizing RSP's really don't seem to understand how they work. You don't really lose the benefit of dividend tax credits or capital gains. Depending on your income, the dividend tax credit in a non-registered account doesn't elminiate taxes, they just reduce it whereas inside the RSP, dividends are 100% tax free for as long as they're in the RSP. Same thing with capital gains, Instead of being taxed on 50% of your gains, you keep 100% of the gains until the RSP is wound up. Do you really not understand the benefits of decades of tax-free compounding of dividends, capital gains and interest?
And what about the immediate deduction every time you contribute to the RSP? That should save at least a few thousand dollars a year which can be put into a TFSA or non-registered account or anywhere else you want. You don't think that adds up to a substantial amount after several decades?
And it's just wrong to say you pay a low tax rate when you're young, and a high one when you're old (and taking money out of your RSP or RIFF). The tax rate you pay is based on your income regardless of age. For most people, their income actually declines when they retire because they no longer have employment income. So the tax on money taken from the RSP or RIFF isn't so onerous. And you're not taxed on what's in the RSP or RIFF, only what you withdraw from it each year, which is just a small fraction (though it increases) of the account value. And if you're paying a lot on what you get from your RSP or RIFF, it's because you've accummulated a lot of money over the years while it has built-up tax-free. I agree there are great benefits to a TFSA, and to dividends and capital gains from a non registered account, but to suggest there are not signifant benefits to RSPs and RIFFS is just ignoring (or misunderstaning) the facts.