Man­ag­ing Your Money - Last minute RRSP tips to save on taxes and build your re­tire­ment nest egg

The Southwest Booster - - NEWS -

It’s near­ing dead­line time once again. The dead­line for mak­ing your 2013 con­tri­bu­tion to in­vest­ments held in your Reg­is­tered Re­tire­ment Sav­ings Pro­gram ( RRSP), that is. And, even though it is only a few days away, you have choices to make that can en­hance your re­tire­ment nest egg and save on taxes. Here are a few last- minute RRSP tips. RRSP dead­line de­tails - March 3, 2014 at 11:59 p. m. is the dead­line for con­tribut­ing to in­vest­ments in your RRSP for the 2013 tax year.

- You may make a max­i­mum con­tri­bu­tion of up to $23,820, depend­ing on your earned in­come in 2013 ( and mi­nus your pen­sion ad­just­ment if ap­pli­ca­ble).

- You’ll find your per­sonal max­i­mum al­low­able con­tri­bu­tion on your most re­cent no­tice of as­sess­ment from the Canada Rev­enue Agency (on line ( A) of the RRSP De­duc­tion Limit State­ment).

- You can carry for­ward un­used con­tri­bu­tion room from prior years.

- You can fill your un­used con­tri­bu­tion room in a sin­gle year or over a num­ber of years

un­til the end of the year in which you reach age 71(or the end of the year your spouse/ com­mon- law part­ner turns 71).

RRSP tax- sav­ing, taxde­fer­ring, in­come- build­ing tips

- Max­i­mize this year’s RRSP con­tri­bu­tion Mak­ing your max­i­mum al­low­able con­tri­bu­tion each taxation year is the best strat­egy for tax sav­ings and to max­i­mize po­ten­tial long-term growth.

- Max­i­mize last year’s RRSP con­tri­bu­tion Catch up on your un­used con­tri­bu­tion room as quickly as pos­si­ble for additional tax sav­ings and en­hanced long-term growth.

- Bor­row to gain You could max­i­mize this year’s con­tri­bu­tion or catch up on past

con­tri­bu­tion room with an RRSP loan. The money you bor­row will gen­er­ate a tax break and add to your tax- de­ferred RRSP growth po­ten­tial. The key is to get a loan at a low in­ter­est rate and pay it back quickly. Use your ex­tra tax sav­ings to help pay off the loan. Split to gain If your spouse’s in­come will be lower than yours over the next few years or in re­tire­ment, a spousal RRSP can gen­er­ate re­tire­ment in­come that is sub­ject to less tax. The plan is in your spouse’s name but you con­trib­ute to it. Your to­tal can’t ex­ceed your per­sonal yearly con­tri­bu­tion room but your spouse’s limit is un­af­fected by your con­tri­bu­tion.

The right RRSP strate­gies will save taxes and help you re­tire with more – but your RRSP alone is usu­ally not enough to fund the re­tire­ment of your dreams. By adding in a well-bal­anced non- reg­is­tered in­vest­ment port­fo­lio, you can get there com­fort­ably. Your pro­fes­sional ad­vi­sor can help make it hap­pen for you.

This col­umn, writ­ten and pub­lished by In­vestors Group Fi­nan­cial Ser­vices Inc. (in Que­bec – a Fi­nan­cial Ser­vices Firm), and In­vestors Group Se­cu­ri­ties Inc. (in Que­bec, a firm in Fi­nan­cial Plan­ning) pre­sents gen­eral in­for­ma­tion only and is not a so­lic­i­ta­tion to buy or sell any in­vest­ments. Con­tact your own ad­vi­sor for spe­cific ad­vice about your cir­cum­stances. For more in­for­ma­tion on this topic please con­tact your In­vestors Group Con­sul­tant.

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