"Using the money to make a 2016 RRSP contribution
now instead of waiting until the deadline will give you almost an extra year of tax-deferred growth.
(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.
This is especially effective if you tend to maximize your annual RRSP contribution
. It's like moving your coins from a pocket with a hole in it to one with no hole.
According to the study, nearly two-thirds of Canadians have made or plan to make an RRSP contribution
. However, the investment they make would be less than last year.
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
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.