Friday, May 20, 2011

Great Question! Should we burn RRSP to pay off credit card debt?


We get this question all the time. It's not just in relation to RRSP, but any sort of stock accounts, equity lines, debt consolidation loans. There are several aspects to consider. First, you have worked hard to build your retirement accounts. Don't touch them! They are for retirement. Don't touch your equity lines, that will cause an unsecured debt to now become secured and debt consolidation loans are just making it easier for you to accumulate more debt. There are plenty of other ways to eliminate your debt without tapping into these alternatives.

Make sure you do your research and are aware of all the pros and cons to each method of getting out of debt. Every situation is different and only you can make the choices that best fit your needs.

Here is a real life situation and the advice they received.

http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/cash-clash-burn-rrsp-to-pay-off-credit-card/article2024590/