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Let me try and throw some light on your question. In my opinion, you should use up the $60,000 unused contribution room in your RRSP.
Having said this, the rest of the investment strategy would depend upon your risk appitite and risk profile. Let me try and throw some light on this as well and give you some options.
I do not know your current cash flows and your current savings. I am making some suggestions based on some presumptions.
You can equally divide the remaining 1,40,000 in the following.
Corporate Bonds -- Consider buying some corporate bonds, which are somewhat riskier than government bonds but pay a higher yield.
Guaranteed Investment Certificates (GICs) -- It’s impossible to lose money in a GIC -- at least, if you don't factor in inflation. These investment vehicles are protected by the Canadian Deposit Insurance Corporation, so if a bank goes bust, your principal will be returned. You don’t want to put all your money in a GIC, though, as they offer very less returns -- comparatively.
Annuities -- Insurance companies offer annuities, which are investments that, in retirement, pay set monthly payments for life. It’s a great option for people who are worried about their cash flow, but it can be an expensive one. Fees are typically higher than what you’d pay on a mutual fund
, and your money won’t get as great of a return as it would if you invested in the market yourself. But your cash is protected and you do get a regular cheque in retirement, which, to many people, is worth the extra costs.
The above mix -- i.e. filling up your RRSP contribution room + dividing the remaining money in to three options above is intended to spread risks equally and ensure balance of risk.
I am sure this would help.
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