It’s February and we’re in Canada, which means two things. One, it’s time to RRRoll Up the Rim to Win. And two, you’ve got less than a month to make contributions to your RRSP that will count for tax year 2016.
This year, the actual deadline to contribute is Wednesday, March 1, 2017.
There are lots of good reasons to invest in an RRSP, including:
- Enjoying the tax-free growth of your retirement savings (until you withdraw the funds).
- The immediate benefit of a deduction for the previous tax year, which can represent hundreds or thousands of dollars in tax savings
- If you have a spouse, contributing to a spousal RRSP in the name of the lower-income-earner can also offer tax advantages in retirement.
- First-time home buyers can use a portion of their RRSP to help finance their purchase.
Generally speaking, you are able to contribute 18% of your 2015 earned income to your RRSP, but there’s a lot more to it than that. Determining exactly how much you can contribute can sometimes get complicated. To make things simple, refer to your most recent Notice of Assessment (received after you filed your last tax return), or do a Google search for “CRA My Account for Individuals,” administered by the Canada Revenue Agency. Both of those tools will show you exactly how much you can contribute to your RRSP this year – right down to the dollar!
So if you’re ready to top up your contributions for last year, feel free to give us a call. We will be happy to walk you through the investment options available, and to discuss which ones might make the most sense for you.