Tuesday, December 7, 2010

RRSP contribution (Q&A)

How to find your contribution limit for 2010? Your Notice of Assessment for 2009 will indicate the contribution room available. The room will include any carry forward room that you have not used till end of 2009 and any contribution room added in 2010 based on 2009 earned income.

What is included in earned income?  For RRSP purposes, earned income is the annual total of: employment income, net rental income, net income from self employment, royalties, research grants, alimony or maintenance payments, disability payments from CPP or QPP and supplementary UIC payments.

What is the deadline for contribution for 2010? Any contribution made till March 1st 2011 can be used to deduct against your total income in 2010.

Can I contribute to RRSP at any age?  You can only contribute until end of the year in which the owner of the RRSP turns 71. If you are 72 and if your spouse is 69, if you have contribution room available you can make a RRSP contribution to spouse’s spousal RRSP. But you can’t make contribution to your RRSP as you are older than 71 at the end of the year.

At what age, I have to convert the RRSP to RRIF? You can convert your RRSP to RRIF at any age until the end of the year in which you turn 71.

RRSP resources
http://www.cra-arc.gc.ca/E/pub/tg/t4040/t4040-10e.pdf
http://www.globeinvestor.com/resources/personalfinance/rrsp/glossary.html
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/cntrbtng/menu-eng.html




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4 comments:

vijay said...

This is very nice and informative post. Do you really think that RRSP is good investment in comparison with others
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Accountant said...
This comment has been removed by the author.
Accountant said...

It depends on personal scenario. For someone who has good company pension , RRSP may not be the right path to go but it is a good retirement savings vehicle to a person who does not have a company pension.

Blogmakesmoney said...

thnaks for this nice blog lot of useful info