How much should I contribute to my RRSP? - harjinder

How much should I contribute to my RRSP?

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blog image October 13, 2020

How much should I contribute to my RRSP?

This is a very tricky question because it would be depending on your financial situation. Sometimes, it doesn’t make sense to contribute to making a contribution; this could be because you have low income or you’re paying off a debt that has a high-interest rate. This can raise questions, that if you should open an RRSP account at all. We would advise that you do as the account acts as a savings vehicle and which can help you avoid any type of financial crisis in your golden years. Now, to understand a bit about RRSP and how much you can contribute to it, read on or you can get in touch with Harjinder Sandhu for further details. He would be more than happy to help you.

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Your contributions
Your contributions towards your RRSP account would depend on your income and it would be 18% of your earned income with respect to your last year’s income or $26,230 (the lower amount). If you could not complete the contribution quota in a year, you can pay the extra
amount in the following one. You can find the maximum annual contribution for one Taxation year on the CRA online.

Another benefit of this type of account is, you can withdraw any amount at any time for anything; it can be used for any emergency or you can spend it on a holiday, the choice is up to you. There is one downside though; if you contribute, then you would have to pay 1% surcharges on the extra amount till the total contribution is balanced (you can do this by contributing less in the following month). If you have any queries, you can call Harjinder and get them resolved.
Limit increment
Since its inception in 1991, the upper limit of an RRSP account has been annually revised by the Canadian Government, and as of 2019, the threshold has reached $26,500. It’s advisable to invest 10% of your gross salary in the account, so by the time you retire, you can rest easy and not think much about any type of financial issues. So, what are you still waiting for?

Contact Harjinder Sandhu, and open your RRSP account today!

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