Most people are paying more tax than they need to. How do we know? It is simple. Only 22.5% of tax filers in Canada contributed to an RRSP, according to the latest census data (2016). That means 77.5% are not taking advantage of the tax benefits this investment tool offers. Here are the facts:
- Your RRSP contribution lowers your taxable income for this year, so you’re reducing the amount of tax you have to pay now while you are in a higher tax bracket.
- Rather than paying a high marginal tax rate now, based on your current income, an RRSP lets you pay tax on withdrawals, if you wait until you are retired, you could benefit from being in a lower tax bracket.
- The RRSP contribution limit is based on 18% of your earned income—noting there is a certain ceiling to watch for.
- Maximum 2018 contribution limit: $26,230
This helpful e-book outlines a few RRSP strategies that could help you take advantage of this great investment and tax management tool.
Call me to discuss your unique financial goals and we can work together to develop an investment plan that’s just right for you.