Contribute to Your RRSP

Contributions to RRSP’s are tax deductible and the income earned within the plan grows tax deferred until retirement. You can claim a contribution of up to 18% of 2020 earned income to a maximum of $27,830. Earned income is defined as income from employment, business, net rental income from real estate, CPP/QPP disability pension, certain types of royalties, and spousal or child support payments that are included in your income.

The contribution limit may be subject to the year 2020 pension adjustments. Pension adjustments reflect, in most cases, your employer’s contributions to a pension plan or actuarial commitments to such plans in the year 2020. You can find the amount of your RRSP contribution room on your 2020 Notice of Assessment.

You can contribute to your RRSP up to December 31st in the year you turn 71 years old. This is also the age/date limit for converting your RRSP into a RRIF or annuity otherwise the full proceeds of your RRSP will become taxable. Even if you are over 71, if you continue to have earned income and your spouse is 71 years of age or less in the year, consider contributing to a spousal RRSP for them. You will be entitled to the RRSP deduction on your 2021 tax