Have you made your RRSP contribution yet?

Once again RRSP season is upon us! Unfortunately many investors leave it to the last minute to make their annual contribution. When you are considering this year's RRSP contribution, here are some basic principles to observe:

Don't wait for the markets to improve

One of the reasons cited for not making an RRSP contribution is the doom and gloom from the media on the condition of the world's stock markets. This year, more people are taking a wait and see approach-a big mistake! As the RRSP is usually a long-term investment, it should be a fine time to pick up some good investments at reasonable prices. We don't have a crystal ball to predict when the market will recover, but we do realize that it makes sense to buy low while you still can.

Develop a fully balanced portfolio

If you don't know what kind of investment is best for you in these volatile times, you may want to consider the full range of investments available, along with the risk and return potential of each. We can help you develop a balanced, diversified portfolio of RRSP assets that will meet your current and long-term needs.

Consider a Spousal RRSP

The goal of a spousal RRSP is to equalize your income in retirement so that when you eventually draw income from your RRSP (or other sources), you balance the taxable amount between two taxpayers instead of one. This will help you minimize the amount of potential taxes you pay during retirement. To achieve this objective, you can make spousal contributions even if you contribute to your own plan, but the total amount must not exceed your own maximum allowable contribution. Although the assets belong to your spouse in this case, you should pay attention to the attribution rules.

Understand RRSP over-contribution limits

All RRSP holders have a lifetime over-contribution allowance of $2,000. But be careful with over-contributions, because beyond the $2,000 limit, a penalty of one percent per month is payable on the excess contribution.

Please contact our office to make an appointment to set your goals and objectives and build an investment plan around them.