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The cost of missing the RRSP deadline

It’s no secret:  the most effective way for most Canadians to save for retirement is the Registered Retirement Savings Plan (RRSP). Missing the RRSP deadline for making your 2015 contribution can actually be very costly in the long term.

Here’s why:

  • If you are in a high income bracket this year but will have a lower marginal tax rate in a future year, your tax benefit from that future RRSP contribution will also be lower. Take advantage of your position today.
  • If you make an RRSP contribution and get an additional tax refund, you can consider paying down debt or makinginvestments appropriate to your diversification requirements and tolerance for risk.
  • The government does not allow you to make RRSP contributions after the end of the year that you turn age 71. So, if you (or your spouse) are turning 71 in 2016, you should consider making an RRSP contribution by December 31, 2016. Don’t lose that tax-saving opportunity.
  • If you are making a contribution to a spousal RRSP, do it before December 31 each year. This will help reduce the amount of time you must wait before it can be withdrawn. Current rules state that a contribution to a spousal RRSP must stay there for three calendar years before it is withdrawn.
  • If you are claiming a spousal RRSP deduction for a deceased spouse or common-law partner, the contribution to the spousal RRSP must be made in the year of death or during the first 60 days after the end of that year. Otherwise, the opportunity for this deduction will be lost.

The deadline for making RRSP contributions for the 2015 tax year is February 29, 2016. Don’t miss this deadline: the costs simply aren’t worth it. Visit to find out about other tax-saving, income-building opportunities and talk to your professional advisor soon.

Editor Note: This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), and Investors Group Securities Inc. (in Québec, a firm in Financial Planning) presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances. For more information on this topic please contact an Investors Group Consultant.