RRSP Checklist

When it comes to planning for your RRSP contribution, it can sometimes be confusing, and a little daunting. Here are some helpful tips – a last-minute checklist before making your RRSP contribution:

Find Out How Much Room You Have

One quick way to find out is to look at your notice of assessment from last year. Pay particular attention to any contribution room you may have stockpiled from the previous year. Obviously, you'll want to tackle unused contribution room now if you can.

Explore Your Contribution Options

There are many different ways to structure your contribution. The trick is to think about how you'll be making your contribution before you actually make it, so as not to make it an undue strain on your February finances.

Don't "Park" Your Money

Speaking of last-minute contributions, waiting until late February to contribute can often mean waiting even longer to decide where to invest it. While late is better than never, once you've made the deadline, don't let your money sit around. In real life, there is no such thing as "Free Parking": The growth you stand to lose by keeping your contribution in cash can be quite significant.

Think About Withdrawals

If you're nearing retirement, you'll want to think about how to time your RRSP withdrawals. Because RRSP withdrawals must be included on the current year's taxable income, when you take money out can make a big difference to the overall tax you pay.

Have A Plan For Your Tax Refund

Instead of spending your refund when it comes in, incorporate it into your financial plan. That may mean rolling it back into your RRSP, but it doesn't have to. Refunds are great for paying down credit card debt, making other investments, or accomplishing some other financial goal.

Have A Retirement Plan

The most important tip you'll ever get: Your RRSP is one of the fundamental pillars of your overall financial plan. Create a retirement plan to fit your needs.

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