Yesterday I was browsing the financial post’s website, and came across this article: http://www.financialpost.com/story.html?id=1826891

Jon Chevreau discussed the market meltdown with Malcolm Hamilton, a pension actuary.  Hamilton suggests making TFSA contribution room retroactive to age 18 to help offset pension losses realized in the last couple of years.

It’s an interesting idea, but I’m curious of the impact.  It would obviously affect the amount of tax that the federal government collects, and uses to implement programs.  Now, don’t get me wrong: I’m all for paying as little tax as legally possible through proper tax planning.  But they’re already running heavy deficits, and this could compund the problem.

Hamilton says his suggestion would aid most the people with defined contribution pensions, whose portfolios have been ravaged by the recent market downturn.  I’m sympathetic to them, especially to those whose pensions were administed by their employer, and had no input on what their pensions were invested in.  However, those who directed their own pension through a group RSP could have likely mitigated their risk a bit more. (I fully expect many people to disagree with me here.)

It just seems to me that the only people this benefits, are those with a lot of money to contribute to their TFSAs retroactively.  What about the person who just scrapes by while making sure to contribute to their pensions?  To me, it just sounds like another bailout of the wealthy.

I can’t see the government actually implementing these suggestions, but they are curious.  What are your opinions on the matter?

• Previous Entry: Spending money to save money
• Next Entry: The RR Top 5