RRSP Quick Facts
Age Limits
- You can contribute until December 31st of the year you turn 69.
- Contributions to a spousal RRSP can be made until December 31st of the year the spouse turns 69, even if the contributor is over 69.
- Children under 18 can contribute to an RRSP, but are not allowed the $2,000 over contribution limit.
- Earned income is a requirement in all the above cases in order to receive RRSP contribution credits.
Carry Forwards
- Beginning with 1991 contribution limits, you can carry forward unused deductions indefinitely.
- The unused limit is tracked for you by revenue Canada and is shown on your Notice of Assessment each year after you file your tax return.
Contributions Deadline
- Deadline for 2006 tax year is Thursday March 1st, 2007 at midnight.
2007 Contribution Limits
- A maximum of $19,000, less any pension adjustment from the previous year.
Spousal RRSP plans
- Make contributions to a spousal plan to achieve income splitting on the withdrawals upon retirement.
RRSP Loans
- Standard: an RRSP loan is paid off over a 1-year period. Payments can start right away, or can be deferred for 3 to 6 months. Interested rates are at prime.
- Catch-up Loans: an RRSP loan can be paid up to 10 years. Interest rates are usually at prime, or prime + 2%
Labour Sponsored Funds
- In addition to your regular RRSP deduction, “LSFs” also receive 30 - 35% in additional tax credits, up to a maximum contribution of $5,000 annually. If you don't have new money to deposit to your RRSP, we can use exiting funds in a self-directed plan and buy you a “LSF” in order to receive the 30 - 35% tax credits.
Optional RRSP Usage
- RRSPs Can be used to buy a home or to go back to school.