An update to a previous HST post

I made mention a couple of days back that a story on the Internet that was being promoted by the rabid right was an analysis of the cost of the planned HST in Ontario by someone called a Boomer Wealth Coach.

I suggested that the Coach and I have a debate.  No acceptance at this time.

In my response to the post, I mentioned that the provision for HST applying to RRSP/RRIF was speculative because lobbyists are fighting the provision and that lobbyists usually win their arguments.

What I missed in my response was the gross exaggeration of the HST that could be charged on investment.  The Coach stated that the increase with the Federal/Provincial HST would be $1040 per year on $400,000 in the plan.  IN reality the HST would apply to the management fees paid on RRSP/RRIFs.  So let's calculate that backwards. The increase through the HST would be 8% of the fee, therefore the fee would be $13,000 per year or 2.6%.  With interest rates on savings at less than 1% you would have been better off putting the money in the bank thus saving the 2.6% cost plus getting the 1% interest.  Don't worry about capital gains, folks.  RRSP/RRIFs have been walloped so bad that they will take some time to create gains!

As the Orange guy would say... "Save your money!"