The earlier in the year you invest in a Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA), the sooner your money can start growing. In other words, don’t wait for the deadline!
You can even sign up for an automatic savings plan for both your RRSP and TFSA, making it easier to save and maximizing your opportunity for returns.
Using income splitting strategies between spouses can yield big tax savings—and contributing to a spousal RRSP is one of the easiest ways to do it. A higher income spouse can also give a lower income spouse funds to contribute to his or her own TFSA.See Is Income Splitting Right for Us?
While you need to make your annual RRSP contribution within a 14-month window to qualify as a current year contribution, you can delay claiming the deduction. If your income fluctuates, it may make sense to claim the deduction in a higher earning year.
If you’ve been offered a retirement or severance package, you may receive a lump sum payment called a “retiring allowance.” Chances are, you can roll over at least part of it into an RRSP directly, which will bypass taxes and maximize the value of your contribution.
RRSP assets can be transferred tax-free between RRSP accounts—and the same goes for TFSAs. If you have accounts at various financial institutions, consolidating into one plan will make it easier for you to maintain a proper asset mix, evaluate performance and reduce expenses.
Retirement can last 30 years or more, so making sure you have the right mix of both secure and growth investments is important. Your RBC Financial Planner can help!
How Can I Be a Smart Investor
Making the Most of a Bonus or Tax Refund
Is Income Splitting Right for Us