Hi everyone, just a quick intro about me, I'm a 27 years old Software Engineer working full time. I just started reading this blog so I'm quite new (but I've always been frugal). I just recently started investing in Mutual Funds because my bank called me to let me know I had too much money sitting in a savings account (about 65k shared between a regular savings account and a RRSP).
Income: 50 000$ CAD / year
Spending: Usually around 2k per month (according to mint.com)
Assets: 11k in chequing account
25k in RRSP sitting in a savings account
30k in mutual funds (20k in TD's balanced portfolio, 5k in Tangerine's balanced portfolio and 5k in Tangerine's equity growth portfolio)
For anyone wondering, RRSP (registered retirement savings plan) is (I think) the Canadian equivalent of your 401k. In short, the money you put in your RRSP is substracted from your income for that year.
Now, the government has a program to help new homeowners, they allow you to withdraw up to 25 000$ from your RRSP at no cost to help with a downpayment, given that you reimburse it (to yourself) within 15 years. (For more info:
http://www.cra-arc.gc.ca/hbp/).
Here's the thing, I already have more than 25 000$ in my RRSP account (currently sitting in a bank savings account (I know I know, I'm scared :P)) and I'm planning to buy a house relatively soon. If I contribute the maximum this year, I will get a tax refund of 6k, however I will not be able to withdraw that money to buy a house. On the other hand, if I do not contributed, I will only get a tax refund of 1k but that money will be freely available. What should I do?
(Edit: added more details on assets)