RRSP's in Index Funds? New to Investing, pls help!

Preparing for life after work. RRSPs, RRIFs, TFSAs, annuities and meeting future financial and psychological needs.
Post Reply
CB1975
Newcomer
Newcomer
Posts: 2
Joined: 01 Dec 2016 15:00

RRSP's in Index Funds? New to Investing, pls help!

Post by CB1975 »

Hi,

I turned 41 this year and am just getting interested in investing. In the last few years I have been fortunate enough to excel in my career where I am finally making and saving good money. I have just been leaving my savings in a Tax Free Savings Account but I feel like I should be doing something more with it to make my money grow.

After doing some initial investigating, it seems like Index funds really match up with my goals around saving.

My question is:

Should I take some of my savings and invest in an Index fund with a company like Vanguard?

Or should I move my current RRSP's into an Index fund?

Should I do both?

Not sure if one is better than the other so I'm looking for some help to answer that. Just to note, I could potentially invest 5-10K into an index fund right now.

Thanks for your help!
Spudd
Veteran Contributor
Veteran Contributor
Posts: 1518
Joined: 22 Sep 2013 14:52

Re: RRSP's in Index Funds? New to Investing, pls help!

Post by Spudd »

A TFSA (tax free savings account) and RRSP (registered retirement savings plan) are types of accounts. You can think of them as containers.

Index funds are investments that you can hold inside those containers. So you can have your RRSP money invested in index funds, or your TFSA in index funds, or both.

It sounds like right now your TFSA is just in cash (a savings account). Is that right? How about your RRSP? What is inside there?
CB1975
Newcomer
Newcomer
Posts: 2
Joined: 01 Dec 2016 15:00

Re: RRSP's in Index Funds? New to Investing, pls help!

Post by CB1975 »

Yes my TFSA is just cash in a savings account, my RRSP's are in "medium risk" mutual funds, I believe thats what they call them. As you can see I haven't been paying much attention to these things and I want to change that.
User avatar
AltaRed
Veteran Contributor
Veteran Contributor
Posts: 33398
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: RRSP's in Index Funds? New to Investing, pls help!

Post by AltaRed »

May I suggest the OP read our very own finiki. It is not a hard read and there is a lot of basic (and even more advanced) information there that will help in portfolio construction.
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom
Spudd
Veteran Contributor
Veteran Contributor
Posts: 1518
Joined: 22 Sep 2013 14:52

Re: RRSP's in Index Funds? New to Investing, pls help!

Post by Spudd »

I agree with AltaRed, it's a good idea to do some basic reading first.

There's a very good book called the "MoneySense Guide to the Perfect Portfolio" that walks you through the basics - see if you can get it from your library, or buy the ebook from Amazon. This is a Canadian-focused book.

There's also a book called "If You Can" which is for Americans, but the general principles are applicable to anyone. Just ignore any parts where they talk about specific American accounts like 401k, etc.

You will want to first take stock of what you have right now. Look at what mutual funds you have and see if you can understand the fees attached, and what type of investments are inside (not the specific stocks, but is it mostly Canadian stock, is it a mix of all over the world, are there bonds, etc).
Post Reply