With the Feb. 29 deadline for registered retirement savings plan contributions looming, many Canadians are wondering whether it is better to pay off debt or add to their RRSP.
Financial advisers say that while making any contribution to an RRSP or a tax-free savings account (TSFA) is always a good thing, clearing up consumer debt should be the first priority.
“If they’re in credit card debt then forget it, all they should be focused on is paying off that debt,” said David Trahair, a chartered professional accountant in Toronto. “Forget buying a house, forget RRSPs and focus on making money and spending less so you can pay off first the credit card debt and then the student loan debt.”
Canadians with taxable earnings can contribute up to 18 per…