MANAGE YOUR MONEY-Last minute RRSP tips – save on taxes, save more for retirement

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The deadline looms for making your 2014 contribution to investments held in your Registered Retirement Savings Program (RRSP). But you’ve still got a few days and a few choices to make that will save on taxes and save more for your retirement. Here are your last-minute RRSP tips.

RRSP deadline details

  • March 2, 2015, at 11:59 PM, is the deadline for contributing to investments in your RRSP for the 2014 tax year.
  • You may make a maximum contribution of up to $24,270, depending on your earned income in 2014 (and minus your pension adjustment if applicable).
  • You’ll find your personal maximum allowable contribution on your most recent notice of assessment from the Canada Revenue Agency (on line (A) of the  RRSP Deduction Limit Statement).
  • You can carry forward unused contribution room from prior years.
  • You can fill your unused contribution room in a single year or over a number of years until the end of the year in which you reach age 71(or the end of the year your spouse/common-law partner turns 71).

RRSP tax-saving, tax-deferring, income-building tips

  • Maximize this year’s RRSP contribution. This is the best strategy for tax savings and maximizing potential long-term growth.
  • Maximize last year’s RRSP contribution. For additional tax savings and enhanced long term growth, catch up on your unused contribution room as quickly as possible.
  • Borrow to gain. You could maximize this year’s contribution or catch up on the past contribution room with an RRSP loan. The money you borrow will generate a tax break and add to your tax-deferred RRSP growth potential. The key is to get a loan at a low-interest rate and pay it back quickly. Use your extra tax savings to help pay off the loan.
  • Split to gain. If your spouse’s income will be lower than yours over the next few years or in retirement, a spousal RRSP can generate retirement income that is subject to less tax. The plan is in your spouse’s name but you contribute to it. Your total can’t exceed your personal yearly contribution room but your spouse’s limit is unaffected by your contribution.