I’ve had RSPs in various forms since my mid-20s. I looted my first employer-matched RRSP for my ill-fated Bachelor of Fine Arts. I emptied the next employer-matched RRSP for a down payment on my house. And then there was the employer-matched RRSPs that I burned to the ground to get rid of some of the high-interest debt that was strangling me.
I found it easy, emotionally speaking, to take money out of those RSPs, because beyond the initial tax deferment, I saw almost zero gain from any of them. None of them ever increased in value enough to validate the basic theory behind saving for retirement, which is, basically, “Compound Interest Will Save You”. If I’d been able to pull funds out of my LIRA when I attacked my debt, I probably would have done that too, because, even accounting for the tax hit I’d take, a 20% (or even a 7%) reduction in interest beats the hell out of the sub-inflation rates of return I’ve gotten over the years.
I have begun to suspect that every RRSP I’ve ever had has been a “no-burn” account. Thousands of dollars invested somehow haven’t grown since the mid-00s when markets pretty much shat themselves. There’s not much reason for me to believe that I’ll ever be able to retire unless I do something differently.
I’m not giving up on RSPs, don’t get me wrong. It makes sense to keep contributing, if for no better reason than some of the withdrawals – specifically, the Lifelong Learning Plan and the First Time Home Buyer’s program – were done in such a way as to allow non-taxed withdrawals if and only if you eventually pay them back. I definitely don’t need a higher tax bill, so I make sure I at least put enough back in to cover those paybacks.
But in the past year or so, I’ve decided that if I’m going to have RRSPs and if my managed accounts are going to have terrible growth rates anyway, I may as well manage them myself. I started using Questrade. Initially I just invested cash, growing my account balance without investing in anything. Recently I’ve started to move money into other things. I put the first batch of money into index funds, which is the bog-standard approach to conservative but solid long-term growth. I’ll likely do some other trades soon, doing all the simple things that they tell you to do – buy commodities, diversify, buy at the risk/reward threshold that you find most comfortable, etc.
I’m probably going to move the leftovers from my previous accounts over to self-managed plans soon. I’ve transferred my RSPs from one provider to another before, and it’s a bit of a pain in the ass, but it doesn’t actually take a lot of work. And I like having at least the illusion of control over my own funds.
It’s no Bitcoin-at-a-dollar, but I’m hopeful.