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DO YOU REALLY NEED AN RRSP?

3/17/2017

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By: Daniel Enayatzadeh
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Many Canadians were scrambling to make a last minute RRSP contribution before the March 1st RRSP contribution deadline. The deadline was the last day in 2017 where an RRSP contribution can count towards a deduction for the 2016 tax year. An RRSP (Registered Retirement Savings Account) is an account which provides Canadians the opportunity to invest in a tax sheltered vehicle while affording them a tax deduction for every dollar that is contributed in the RRSP account.

BUT…do you really need an RRSP?

Many people jump on the RRSP bandwagon without taking a closer look at their personal financial situation and determining if contributing to an RRSP is the right call.

Depending on where you stand financially, contributing to an RRSP next year and not this year may be more appropriate. Depending on your income, especially if you foresee a growth in income, delaying an RRSP deposit may be more tax advantageous. Everyone’s situation is unique and it’s important to consult with your financial advisor and your accountant to determine the best course of action.

There is a reason RRSP’s are wildly popular, they have MANY advantages.

Here are a few:
  • The money you invest will grow tax free, until you make a withdrawal.
  • It’s a great way to build up a retirement nest egg, especially if your employer does not offer retirement benefits.
  • You can use it to place a down payment on your first home.

​In conclusion, RRSP’s are a great tool which most Canadians should be taking advantage of, the question really is HOW they incorporate it into their financial plan.

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Daniel Enayatzadeh is a Financial Security Advisor specializing in investment and insurance planning. He can be reached at 514-996-9400 or at daniel@thefinancialadvisor.ca 

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YOUR VERY LAST RRSP CONTRIBUTION

11/7/2016

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By: Daniel Enayatzadeh

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 daniel@thefinancialadvisor.ca ​
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