Not only can RRSPs be basic, but they can also be self-directed. This term may seem straight forward, but what does a self-directed RRSP cover?
What is a Self-Directed RRSP?
This type of RRSP account gives the owner a lot more freedom over which assets are included within the retirement account itself. This type of account allows you to pick and choose what will be included in your RRSP.
Instead of traditionally allocating a portion of money into your RRSP, you can decide where to invest your money and build your portfolio over time. With this amount of freedom, you as an owner of your RRSP can decide from a wide range of investment options to include in your self-directed RRSP account.
Things to Consider With a Self-Directed RRSP
- Understand the investment fees associated with this account type.
- Remember, diversifying your investment portfolio is key.
- Prepare your risk tolerance with the investments you make.
- As you are managing your own portfolio, can you make strategic decisions without emotions interfering?
Top Benefits Associated With a Self-Directed RRSP
1. Easy-to-Track Portfolio
If your investment portfolio is complex with many different types of investments, this type of account can help you manage them in an easy-to-understand way.
2. Consolidation of Investments
By managing your own RRSP account, you will have an easier time viewing the various investments you are making and thus be able to properly evaluate your investments. With this type of account, you will see diversification is key.
3. Larger Option of Investments to Choose From
Since you are managing your own RRSP account you can choose from a wide range of investment options. This includes investments such as bonds, stocks, precious metals, ETFs, and MICs. This allows you to completely diversify your investments.