Most people fail to realize that the tax deduction you receive from contributing to your RRSP can be carried forward to later in life, even when you’re no longer eligible to contribute. Age 71 is the final year in which you can contribute to an RRSP and receive a deduction. Therefore, this final year can be utilized to lower your income later in retirement and by consequence reducing the potential clawback of government benefits, like Old Age Security.
If you are approaching age 71 and will be shutting down your RRSP for good, it's advisable to consult with your financial and tax professionals to inquire if this strategy is right for you.
Your final RRSP contribution must be made by December 31st of the year you turn 71.
Daniel Enayatzadeh is a Financial Security Advisor specializing in investment and insurance planning. He can be reached at 514-996-9400 or at email@example.com