It’s RRSP season! Do you know how much you can contribute this year?
Happy New Year! Another year, another RRSP contribution deadline.
This year, you have until March 1 to make RRSP contributions that can count as a deduction against your income in 2016. If you know the basic formula to calculate RRSP contribution room, you probably also know that it can make your head spin. It’s 18 percent of your 2015 year’s income, plus any unused room from previous years, less any pension adjustment from 2015.
Fortunately, there’s an easy way to take the guesswork out of this calculation. The Canada Revenue Agency (CRA) offers a tool called “My Account” and you can find it on their website at http://www.cra-arc.gc.ca/myaccount/. By registering for My Account, you’ll be able to see exactly how much you can contribute to your RRSP this season. There are a few other things you can do there as well, but at this time of year the RRSP contribution room feature is probably the most relevant.
Whether you register for My Account or not, now is a perfect time to get together and discuss any plans you have for contributing to your RRSP this year. And if you’re not doing this already, we can talk about the idea of making regular monthly contributions to your plan throughout the year, which is sometimes easier than making a larger contribution at the deadline.
Feel free to give me a call if you’ve got any questions about investment options, strategies, or if you’d simply like to go over your portfolio. You’ll be able to see how to reach me at the “Contact” page on this site. Or if you don’t have an RRSP yet, we can talk about how to get you started. Building your retirement savings with an RRSP can be a very effective way to prepare you for your life after work.