The registered retirement savings plan marketing blitz has begun. The short-term reward is a tax refund in the spring, but there are at least three situations when it’s probably better to take a pass.
It’s a reminder from the finance industry that the deadline to deduct a contribution against last year’s taxable income is March 1.
Marginal tax rates rise as an individual’s income grows. Canadians who made less than $45,000 last year, for example, normally pay less than 20 per cent. The rate grows as income grows; sometimes over 50 per cent on the top tier amount. Young Canadians might want to take a pass and save their RRSP space for their higher-income years. Contributions to a tax-free savings account might be a better idea because - while the contribution is not tax deductible - withdrawals are not taxed.
In comparison, if you invest in an RRSP, the best comparable guaranteed return from a guaranteed investment certificate is close to five per cent. And there’s no escape. Ottawa will eventually impose minimum withdrawal amounts when they force you to convert your RRSP to a registered retirement income fund the year after you turn 71.
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
It's possible to have 'too much' in your RRSP: Tax expert - BNN BloombergAs the deadline for registered retirement savings plan contributions approaches, one tax expert said it is possible for Canadians to have too much of their savings in a RRSP.
Read more »
It's possible to have 'too much' in your RRSP: Tax expert - BNN BloombergAs the deadline for registered retirement savings plan contributions approaches, one tax expert said it is possible for Canadians to have too much of their savings in a RRSP.
Read more »
A kinder, gentler way to compare your TFSA, RRSP and cash savingsRob Carrick and The Globe and Mail personal finance team are working on a kinder way to benchmark your finances
Read more »
It's possible to have 'too much' in your RRSP: Tax expertAs the deadline for registered retirement savings plan contributions approaches, one tax expert says it is possible for Canadians to have too much of their savings in a RRSP.
Read more »
TSX today: Index down more than 100 points amid energy sector weakness - BNN BloombergLosses in the energy sector helped lead Canada's main stock index lower in late-morning trading as it fell more than 100 points, while U.S. markets also fell ahead of the U.S. Federal Reserve's latest interest rate decision this afternoon.
Read more »
FedEx to cut global management jobs by more than 10%, CEO says - BNN BloombergFedEx is cutting its global management jobs by more than 10 per cent to become a “more efficient, agile organization,” Chief Executive Officer Raj Subramaniam said in a memo to employees.
Read more »