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You are correct in that, though dividend tax rules are complicated and differ all over the place too. In Germany you pay a flat 25% (which is already better tha

You are correct in that, though dividend tax rules are complicated and differ all over the place too. In Germany you pay a flat 25% (which is already better than it used to be. You used to pay your regular tax rate, whatever that would've been. Probably higher than the 25%. But 0% sounds better to me.). Now here in Canada you pay something like half of your tax rate and its different whether they're "eligible" or not and such things. But all that is only outside of tax sheltered accounts and at least on my end I don't make enough to worry about calculating that. Then again at least here in Canada you also need to be aware of the whole withholding tax thing on US stocks and the implications for your dividends coz the US recognizes RRSPs as tax sheltered but not TFSAs... Of course I won't really know whether I maybe make more in retirement than I do now but I personally believe that I will definitely make less than I do now. And if I really do earn more in retirement than I do now then I am probably very well off an it will in part be because my RRSP and TFSA contributions were able to grow without loosing 25% of the dividends all the time. So if compounding then does its thing and make me rich (I doubt I'll actually be rich from that though) then I'm fine with being taxed on it then.

Scoundreller 5y ago
> I personally believe that I will definitely make less than I do now. It's not so much about whether you'll make less or not, but if you'll make enough less to land in a lower tax bracket to take advantage of the deferral. And avoid dying and having to pay tax on it all at once (unless you can shift it to your spouse, but then they may have a high income problem too, negating the benefit of the deferral). RSPs can be great, but I think they're oversold to the working class as a tax advantage.
- tharkun__ 5y ago
  If you don't mind my asking, what kind of income are you talking about if you are not gonna be in a lower tax bracket in retirement? Different question since you seem not to like tax deferral. What makes you not like tax deferral and compounding on the extra ~25% of dividends you keep? I can't do much about when I'll die. I do advocate for 'living now' btw. If you can do that 'trip around the world' now or put money into a pension fund, do it now. Don't wait, have kids and tell yourself you'll do it when you retire. That day may never come or you might not be up to it any longer for various reasons.

Scoundreller 5y ago

> I personally believe that I will definitely make less than I do now. It's not so much about whether you'll make less or not, but if you'll make enough less to land in a lower tax bracket to take advantage of the deferral. And avoid dying and having to pay tax on it all at once (unless you can shift it to your spouse, but then they may have a high income problem too, negating the benefit of the deferral). RSPs can be great, but I think they're oversold to the working class as a tax advantage.

tharkun__ 5y ago
If you don't mind my asking, what kind of income are you talking about if you are not gonna be in a lower tax bracket in retirement? Different question since you seem not to like tax deferral. What makes you not like tax deferral and compounding on the extra ~25% of dividends you keep? I can't do much about when I'll die. I do advocate for 'living now' btw. If you can do that 'trip around the world' now or put money into a pension fund, do it now. Don't wait, have kids and tell yourself you'll do it when you retire. That day may never come or you might not be up to it any longer for various reasons.