Q&A with Gordon Pape: Twin Savings Goals

Should you create different investment portfolios for different goals?

Q – My son wants to save for a home down payment in five years but also for retirement in 30-35 years. Should he create different investment portfolios for the different goals? – George F.

A – One way to do this is to maximize RRSP contributions. When the time comes to buy a first home, he can use the Home Buyers’ Plan for an interest free loan for part or all of the down payment. He should repay that loan as quickly as possible to minimize the negative impact it will have on retirement savings. Using this approach keeps all the assets in one account for ease of management.