Avoid the Last Minute Rush

Contribute To Your TFSA and RRSP Today

February 1, 2019

The rush to make that proverbial last-minute Registered Retirement Savings Plan (RRSP) contribution has become one of the most predictable events on my calendar. This year, why not get a head start on both your 2018 RRSP and 2019 Tax-Free Savings Account (TFSA) contributions?

Tax-Free Savings: A Flexible Way to Save, Tax-Free

Canadians have embraced Tax-Free Savings Accounts (TFSA) as a key investment and savings vehicle. The tax-free growth of income and capital gains earned within the account may provide you with additional savings when compared to investments held in a non-registered account. You also have the flexibility to withdraw your savings whenever you need it. A TFSA is an effective way to save for your important goals, whether you’re saving for retirement, your first home or a new vehicle. While you do not receive a tax deduction for TFSA contributions, your investments grow tax-free and you do not pay tax on withdrawals.

Canadian residents 18 years of age and older can contribute up to $6,000 to their TFSA (now indexed to inflation), plus any unused room and any amounts withdrawn in 2018 (with the exception of any funds withdrawn because of an over-contribution). And, like your RRSP, the earlier you start contributing, the more you’ll benefit. Since the TFSA was first launched in 2009, your total contribution room could total up to $63,500.

RRSP Savings: Contribute Early and Maximize Your Contributions 

The more you contribute to your RRSP and the earlier you start, the more you’ll benefit from tax‑free compounding over time. For the 2018 year, you can contribute up to a maximum of $26,230, less any pension adjustment. Instead of waiting until the end of the year to make a lump sum contribution, consider establishing a regular investment plan. You can choose how much to invest and how often, and you won’t have to worry about rushing to contribute to your RRSP before the annual deadline.

You have until March 1, 2019 to make your contribution to your RRSP, for the 2018 tax year. If you haven’t maximized your 2018 RRSP or spousal RRSP contribution, I encourage you to avoid the rush and contribute today.

If you have any questions about your annual TFSA and RRSP contributions or would like to book a review appointment, please call me at 519 883-5353. I look forward to speaking with you.