Community News

Monday, February 9, 2015

Five reasons why you do not want to miss the RRSP contribution deadline

The annual RRSP contribution deadline for the 2014 tax year is fast approaching. If you’re still on the fence about making a contribution or topping up your contributions before the March 2, 2015 deadline, here are five good reasons why you might want to.
1)     You’ll need it. Canadians are living longer and retiring earlier, meaning most will need more money in their retirement savings than ever before.
2)     The tax deduction. Any contribution you make before March 2, 2015 earns you a tax deduction for the 2014 tax year. The actual amount you’ll receive depends on your tax bracket.
3)     Tax-deferred growth. Contributions to an RRSP — and the income generated from that investment — aren’t taxed until you begin to make withdrawals, usually in retirement and in a lower tax bracket.
4)     Freedom in your fifties. You won’t start receiving money from the Canada Pension Plan (CPP) until you turn 60. Old Age Security (OAS) doesn’t kick in until 65. If you want to retire early, an RRSP is one of the best ways to ensure you’ll still receive an income in your 50s.
5)     There’s no time like the present. Saving for retirement isn’t always easy, nor is it as enticing as putting your money toward a new car or a warm vacation. But the sooner you start to contribute, the more income you’ll have in retirement. You’ll thank yourself later.

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