The ITA prescribes a Pension Adjustment (PA), which reduces RRSP contribution
room by the deemed value of retirement benefits earned in the previous year, multiplied by nine (the Factor), minus $600--which adds back a small amount of contribution room in recognition of the fact that not all DB plans have the ancillary benefits assumed by the Factor.
33) However, there is still a large unused RRSP contribution
room as of 2011 amounting to over $680 billion.
However, note that both the employer's and employee's contributions will reduce the employee's available RRSP contribution
room in the following year.
According to the study, nearly two-thirds (64 percent) will be making an RRSP contribution
before the March 2, 2015 deadline.
Respondents were asked to complete the sentence, "When making an RRSP contribution
, we feel ," by choosing as many words as they wanted from a list provided.
According to the study, nearly two-thirds of Canadians have made or plan to make an RRSP contribution
Currently, the average RRSP contribution
in Canada is between USD2,000 and USD2,500 a year.
Allowable RRSP contribution
is the lower of: 18 per cent of earned income from the previous year or the maximum annual contribution limit for the taxation year (RRSP contribution
room for 2008, 2009 and 2010 are $20,000, $21,000 and $22,000 respectively) or the remaining limit after any company sponsored pension plan contributions.
Members electing to opt out would continue to receive their existing remuneration and RRSP contribution
Budget 1999 eliminated surtaxes on the wealthiest Canadians; Budget 2000 dropped the corporate income-tax rate from 28 to 21 per cent; and Budget 2003 benefited the wealthiest eight per cent of tax filers by increasing the RRSP contribution
A $1,000 RRSP contribution
earning ten percent return grows to nearly $11,000 in 25 years, compared to just $9,800 in 24 years.
By increasing RRSP contribution
limits and establishing the carry-forward provision, the Government is encouraging individual Canadians to prepare for self-sufficient retirement.