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FAQs

  1. Is there an age limit for contributing to an RRSP?
  2. What is the final date I can contribute to an RRSP if I want to take advantage of a tax deduction for my tax return?
  3. How can I find out the maximum amount that I can contribute to a RRSP this year?
  4. If I am waiting to come into some money so I can increase my contribution, will it amount to the same?
  5. When should I start contributing to an RRSP?
  6. What is earned income?
  7. How do I estimate how much I will need at retirement?
  8. Can I take advantage of tax savings while contributing to my savings plan?
  9. Should I increase the amount of my contributions?
  10. Although my income is sufficient, I do not have ready cash available to invest in an RRSP. What should I do?

  1. Is there an age limit for contributing to an RRSP?

    Yes, there is an age limit. You can contribute to your RRSP until the end of the year in which you turn 71 and to your spouse's RRSP until the end of the year in which he or she turns 71.

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  2. What is the final date I can contribute to an RRSP if I want to take advantage of a tax deduction for my tax return?

    As a general rule, contributions made during the year are deductible from taxable income during the same or subsequent years, while contributions made within the first 60 days of the year may be deducted from taxable income of the preceding year, the current year or subsequent years.

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  3. How can I find out the maximum amount I can contribute to a RRSP this year?

    To find out the maximum amount that you can contribute this year, check the Canada Revenue Agency (CRA) tax assessment notice which you received after filing your tax return last year to find the amount indicated on the "RRSP Deduction Limit Statement." If you cannot find your notice, contact a CRA tax office or visit the electronic services section of their site www.ccra-adrc.gc.ca NOTE - This link will open in a new tab..

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  4. If I am waiting to come into some money so I can increase my contribution, will it amount to the same?

    No, it will not. A minimum annual contribution paid into an RRSP over a longer period of time is generally more advantageous. Contributing at the beginning of the year will amount to more in the long run.

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  5. When should I start contributing to an RRSP?

    You can start an RRSP as soon as you start earning income, or as of the age of 18. Time is money: the earlier you start contributing, the bigger your RRSP will be.

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  6. What is earned income?

    Earned income is composed mostly of employment earnings, business earnings, rental income and taxable support payments, from which are deducted union or professional dues and business or rental losses and deductible support payments.

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  7. How do I estimate how much I will need at retirement?

    It is generally recognized that you will need 70% of your income during your retirement years to maintain your standard of living. Although at age 60 you are entitled to various sources of income, in most cases this is not enough to maintain your lifestyle.

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  8. Can I take advantage of tax savings while contributing to my savings plan?

    Yes, if you contribute to a Desjardins Group RRSP at your place of employment. This method allows you to build up capital for retirement, and earn tax savings with every paycheque while contributing to your RRSP. If your employer does not offer this type of plan, suggest that he or she get in touch with the Desjardins caisse.

    If you are contributing to an Instalment RRSP, you can also request that both Revenue Ministries reduce the tax deducted at source on your salary. This will, in effect, reduce the cost of your contribution.

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  9. Should I increase the amount of my contributions?

    The compounding effect on your interest means the more you save, the more you earn. When it comes to RRSP contributions, the motto of "the more the merrier" is truer than ever. In short, every dollar that you have the capacity to add to your RRSP increases the capital on which the interest is calculated. So if you have extra funds or if your financial situation improves, it is to your advantage to contribute these amounts to your RRSP. Even an additional $5 per week in an Instalment RRSP or a Group RRSP will make a difference at the end of the line.

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  10. Although my income is sufficient, I do not have ready cash available to invest in an RRSP. What should I do?

    There are many reasons why you may not have enough ready cash to contribute to your RRSP. One option is to take out a short-term loan. This way, you can increase your RRSP contribution and profit from the tax break. With the savings, you can pay back part of the loan and reduce the number of payments, as well as the interest charged. Another option is to avoid loans altogether by contributing regularly to an Instalment RRSP and integrate saving into your budget.

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