Gam....

Having been retired for a while,I have had ample time to ponder the tax question...

 And how to get more money into my RRSP//

I'm Canadian so know little of US taxes...

So while I was a working stiff ,about 1990,I had enough RRSP's  between my wife and I to change them into Self Directed RRSP's...

Once I did that I cashed in the RRSPs inside and had a whack of cash...

Then I bought a house with the cash and put a mortgage on the house and split the mortgage ...60% in mine and 40% in my wifes...

That paper replaced the cash I took out so it was not taxable...

And now I had a chance to make mortgage payments to myself  and my wife...

into our RRSP's...which were not counted as yearly contributions..

And  I get to  set the interest rate I was charging myself...The only cavaet that Rev.Canad and the bank put on that was that it must fall with in the banks upper and lower limits..

So I charged myself the maximum interest rate and socked it away in our RRSPs///

Are you still with me..??

I loose an awfull lot of people around this point..

I then had two mortgages in two accounts..one mine and one my wifes..

These mortgages must be life insured...

Bonus..

If anything happens to either of us ,they are both paid off and the house goes to the survivor ..tax free..

Neat eh..??

There are expenses and management fees to this plan that you pay the SDRRSP administrator but they are small ..couple of hundred a year each..

And I always gave my self one year open mortgages..pay off any amount any time..or change the terms..or all sorts of angles..Pay more ...and in the first couple of years it is all interest not much principle pay down..

You have to think backwards from a conventional mortgage borrower..Think like a mortgage lender..how can I screw the borrower..and then do it to your self...And make more money...

When I did this back in '90 ,I had been thinking about it and it took me two years to get the funds in the right place and go to cash at the right time so it was available to use as mortgage money..

I then explained to my wife what I was thinking of doing ..she said it wouldn't fly with Rev.can.....she worked for a charted account for years and never heard of anything so ridiculous..and I was going to land in jail..

So them I went to my bank who had never done it or heard of it...and they had to get the info from head office in Toronto to find out if this was legal and how to do it..

I called Rev Canada and after a long chat with them they said I could do it...Take out cash...replace it with a mortgage(Paper security)..just like a stock or a bond...and no taxation is triggered..

So I did it and just paid it out a couple of years ago...so was paying ourselves copious usuerous interest rates into our retirement funds...

But all that remembering has made me tired so I think I'll have a snooze....

Ahhhhh...the stress  of retirement..

I'll share some other tax goodies later but must have my afternoon snooze..

Hold the fort and I'll be back..