RRSP Contribution Deadline for 2024 Tax Year – Monday, March 03, 2025

We are now just about 6 weeks away from the RRSP contribution deadline of March 03, 2025, for the 2024 tax year. Below are some quick refreshers on RRSPs:

RRSP contribution eligibility:

• Anyone who has earned income and filed a tax return can contribute until December 31 of the year they turn age 71
• Spousal RRSPs can be used until December 31 of the year the spouse turns age 71

Should you be using or topping up your RRSPs?
If you’re unsure, please contact us ASAP to further discuss your specific situation.

Contribution limits and where you find your limit:
The annual RRSP contribution limit is the lower of 18% of your earned income from the previous year or the maximum annual contribution limit coupled with unused contribution room from past years. RRSP contribution room can be carried forward to subsequent years if you don’t maximize your room this year. There is also a one-time $2000 lifetime over-contribution allowance but note that this amount is not tax deductible.

> Here is a chart indicating the maximums in past years. For your personal contribution limit, please check your most recent Notice of Assessment from CRA.

The power of Dollar-cost averaging:
We are huge advocates of automating your long-term savings contributions as it’s one of the best ways for forced savings. Dollar-cost averaging means you buy more units when the prices are low and fewer units when prices are high.

Spousal RRSP:
This strategy makes sense for spouses where one spouse earns more than the other spouse. This allows for the higher-income spouse to deduct the contribution from their taxes and for the lower-income spouse to own the RRSP. This is a great way to be proactive about future income-splitting opportunities.

RRSP Contribution Calculator:
A common question we often get is how much of a ‘refund’ will one receive based on a certain dollar value. Here is a calculator that will help calculate the approximate tax savings from the RRSP contribution.

First Time Home Buyer’s Plan (FHP) and Lifelong Learning Plan (LLP)
If you have taken advantage of one or both of these programs, please remember to contribute and allocate the specified amount as noted on your notice of assessment when you file your taxes. Otherwise, the repayment amount will be added to your income. For example, if you took out funds in 2019 to purchase your first home, your first repayment is due for the 2021 tax year and you have 15 years to repay what you took out.

**RRSP withdrawals taken from January 01, 2022, to December 31, 2025 will have a 5 year grace period before repayment is required.**

For the lifelong learning plan, you also have a 2-year grace period before repayment begins, except you have 10 years to repay the amount you took out.

RRSP to FHSA
The First Home Savings Account (FHSA) was introduced in 2023. The contribution limit is $8000/year up to a maximum of $40,000. If you’re short on funds to contribute to the FHSA – a tax-sheltered transfer can be done from your RRSP to your FHSA. Please note that there is no tax deduction on the FHSA if a RRSP transfer is done.

Please do not hesitate to contact us if you have any questions about RRSPs or whether it makes more sense to consider TFSAs or FHSAs for your situation.

Ascent Group Benefits – A Division of DLD Financial Group Ltd.

Did you know DLD has an entire division dedicated to Group Benefits? Similar to The Strategic Planning Approach, we follow the same process for our Group Benefits clients. We work with a wide number of industries. We specialize in companies with 20+ employees – if you already have a group benefits plan in place, do not hesitate to contact us for a second opinion to see if there are optimization opportunities.

DLD Leadership Announcement

We are proud to announce that Ryan Stanimir has joined the DLD Partnership effective January 01, 2025. Ryan has been a member of the DLD team since 2017 and has been instrumental in growing our Group Benefits division – Ascent Group Benefits over the last few years. Ryan also has a thriving personal practice working with business owners and professional families. Congratulations Ryan!

DLD in the Media

Check out our comments in the following media articles:

• The Globe and Mail – How to have the right kind of money conversation over Thanksgiving weekend.
• What is Treat Brain – The Peak
• The Globe and Mail – The importance of setting money aside
• CBC Radio Canada – Whose fault is it? $2000 for a resale ticket to Taylor Swift
• Toronto Star – Gig tax target: Uber and Doordash need to report driver income to Revenue Canada

Please do not hesitate to contact us if you have any questions or if there’s anything we can do to help.

Thank you for your time and from all of us at DLD – Happy New Year!

Warmest regards,
Dave, Kelly, Ryan, Aaron, Brandon and Ian

E&OE