Well, it’s almost that time of the year that everyone loves…RRSP season and this year the deadline falls on Tuesday, March 2nd 2015.

This is the last day that RRSP contributions will be applied against your 2014 tax year. If you decide to make a contribution, it’s highly recommended that you don’t go into the bank at the last moment and that you make an appointment to save yourself time and stress. If you’re really busy, you can even make contributions over the phone.

If you’re unsure how much you want to contribute and you don’t have a financial plan, you can make a value judgement based on your tax bracket. Simple look at your applicable tax rates and approximate how much that you will save. For example, if you earned $75,000 in Ontario, then for every dollar contributed you defer .33 cents. It’s important to note that tax rates are tiered, so if your RRSP contribution lowers you into a lower tax bracket then you then defer income at the lower tax rate.

Also, just deposit your funds in a simple RRSP savings account if you’re unsure what to invest in. Right now, many RRSP savings accounts are offered at a 2% promotional interest rate (annual rate) until the end of March. This way you can decide where to invest the money later and not have to worry about pushy sales people.

Next week we will investigate if it even makes sense for you to contribute money to an RRSP over a TFSA.

As always, email me at info@ffcoach.ca with any questions.