What’s my RRSP contribution limit for 2021? + MORE Jan 18th

How to go about securing the best Retirement Plan in Canada.
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TFSA contribution room calculator + MORE Jan 11th

Find out your current tax-free savings account (TFSA) contribution limit by using this calculator. TFSA is a bit of a misnomer. While you can use it for straightforward savings, think of it more accurately as an investment holding account to store things like exchange-traded funds .... More »

Can you maximize your RRSP and TFSA with an income of $0? Feb 22nd

Ask MoneySense I have $119,000 room allowed in my RRSP and $81,000 room in my TFSA. I am 47, live in B.C., currently not earning income as a caregiver for a parent. I have a business with a registered GST number to claim income now or in the future. But for my question, let’s assume I will be c.... More »
 retirement planning

Nicholas Hui, P.Eng, Certified Financial Planner + MORE Mar 22nd

Who is Nicholas Hui? Nicholas Hui was an automotive engineer for 20 years before becoming a Certified Financial Planner. He brings the same systematic approach from his engineering background to his practise now as an advice-only planner. Nicholas specializes in helping young families and profess.... More »

How do the RRSP contribution carry forward rules work? Nov 2nd

If I have $25,000 contribution room left in my RRSP, can I take that all at once plus my regular RRSP contribution of $27,230 for the tax year 2020? Effectively making a contribution of $57,230 to my RRSP?— Lorraine The rules around RRSP contribution room  As soon as a taxpayer starts t.... More »

We’re living longer—here are two ways to boost retirement savings and income + MORE Jan 18th

Maybe you’re taking your first steps towards saving for retirement. Or maybe you’re in the home stretch. Either way, you will likely be using a registered retirement savings plan (RRSP). This Canadian tax-sheltered savings account is more than six decades old, and it has formed the backbone of r.... More »
Although I am 75 and collecting CPP and my company pension, I am still working. My gross income is over $200,000.

A friend said I should apply for OAS right away even though it will all be clawed back. I am worried about the tax ramifications.


Old Age Security (OAS) can start as early as age 65 or be deferred to age 70. For each month of deferral, the pension increases by 0.6% (7.2% annualized). To be clear, that does not mean there is a 7.2% return if you defer OAS. You give up a year of pension to have a 7.2% higher pension for life. 

If you consider the cumulative OAS pension payments, if you defer by a year, you’ll be playing catch-up for the next 13 years. In other words, if you defer your OAS to age 66, it will take you until age 78 to receive more cumulative OAS compared to starting at age 65. 

If you defer your OAS to age 70, it would take only 11 years, to age 81, to catch up on the cumulative payments, but you’ll be that much older and have less time to catch up as well…

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If you’re like many Canadians, you’re hoping you’ve paid enough tax in 2021 and may even be looking forward to a hefty tax refund. (The deadline for filing this year is April 30, 2022, which is on a Saturday, by the way. So you actually have until May 2, 2022 to file.) You can help ensure that happens by knowing the details of your registered retirement savings plan (RRSP), what sets them apart, your contribution limit and a whole slew of other things. Here are the basics:
What’s an RRSP?
A registered retirement savings plan, or an RRSP, is a savings account that you open at a bank or other financial institution. It is registered by the federal government of Canada for tax savings, and you can contribute to the account up to an annual maximum amount. 
What’s special about RRSPs?
Contributions to RRSPs are deductible, meaning they can be used to reduce your taxes. Any income you earn in the RRSP is usually exempt from tax as long as the funds remain in the plan; you generally have to pay tax when you withdraw money from the account…

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Unlike at-home haircuts and hoarding toilet paper, do-it-yourself investing is a trend from the pandemic that’s here to stay. In 2020 alone, more than two million Canadians opened new self-directed investment accounts to buy and sell stocks and other securities—that’s more than twice the people who did the year before.

Regulators worry that without professional advice, investors with limited knowledge and information may lose money. You don’t need a degree in finance to be a successful investor, but it helps to have a carefully considered strategy. The key is common sense: Know your investing goals, be realistic about your risk tolerance, consider your time horizon and base your decisions on thorough research.

Let’s take a closer look at these four factors.

1. Set your investment goals

What are you saving up for—a short-term goal like home renovations or a wedding? Or a long-term goal like retirement or funding your child’s education? Your financial goals can help determine what investments you choose and which account types to use…

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If I have $25,000 contribution room left in my RRSP, can I take that all at once plus my regular RRSP contribution of $27,230 for the tax year 2020? Effectively making a contribution of $57,230 to my RRSP?— Lorraine

The rules around RRSP contribution room 

As soon as a taxpayer starts to earn income—like employment income, self-employment income, royalties, research grants or net rental income—they accumulate room for their registered retirement savings plan (RRSP). There are no age limits, so a teenager with a part-time job can start to build their RRSP room as long as they file a tax return to report their earned income. 

How does RRSP carry forward work?

Your RRSP room carries forward, meaning the amount is cumulative. So, 18% of your earned income for the previous year, up to the current year’s maximum contribution limit, becomes your RRSP room for the year. For 2022, the maximum is $29,210 for taxpayers with at least $162,278 of earned income in 2021. This gets added to any previously unused RRSP room from the past…

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