RRSP

Question 1

RRSP Deduction Limit (Contribution Limit)

Answer 1

Unused deduction room at the end of the previous year PLUS LESSER of the following two:

-18% of previous years earned income
-Annual RRSP Limit ($29 210 in 2022)

Question 2

RRSP 4% Rule

Answer 2

A point where you can comfortably withdraw 4% of your savings in first year of retirement and can adjust that every year for inflation without running out of money in at least 30 years.

Question 3

2023 RRSP Limit

Answer 3

$30 780 (Up from $29 210 in 2022) or 18% of earned income.

Question 4

Mature Date of RRSP

Answer 4

31 December of year you turn 71

Question 5

What happens at maturity of an RRSP

Answer 5

Funds must be withdrawn, transferred to a RRIF or used to purchase an annuity.

Question 6

What is a RRIF

Answer 6

Registered Retirement Income Fund

Question 7

Tax implications of a RRIF

Answer 7

Earnings in a RRIF are tax-free.
Amounts paid out of a RRIF are taxable on receipt.

Question 8

Which assets should retirees draw from first?

Answer 8

Minimize tax up front: draw from less-taxed assets first.

Keep in mind you must start withdrawing from (fully taxable) RRIF at the end of the year you turn 71.

Question 9

Contribute to TFSA or RRSP?

Answer 9

If you typically get money back from the government after taxes, TFSA

If you typically owe money to the government, RRSP

Question 10

How much can you over contribute to RRSP without penalty?

Answer 10

Typically up to $2000, but anything overcontributed is not tax deductible.

Question 11

Overcontribution tax penalty for RRSP

Answer 11

If overcontributed by more than $2000, a 1% tax penalty could be levied on excess amount until it is removed from RRSP

Tax must be paid within 90 days of the end of the year or you could be charged a penalty and interest.

Question 12

Can I contribute to my RRSP after 71?

Answer 12

No but you can contribute to your spouse’s RRSP if they are still not yet 71.

Question 13

Amount I can contribute to spousal RRSP

Answer 13

Total amount contributed to spouse’s and your own RRSP can not exceed your personal contribution limit.

Question 14

Minimum age for investing in RRSP

Answer 14

No minimum age. If you’ve filed an income tax return and have employment or business income, you qualify.

Question 15

Two situations where you can withdraw from RRSP tax free.

Answer 15

Home Buyers Plan (HBP)
Lifelong Learning Plan (LLP)

Question 16

Withdraw limit for Home Buyer’s Plan (HBP)

Answer 16

$35000 from RRSP per eligible person
($70 000 if purchasing with a partner. Must be common law, married, or have kids together).

Question 17

Home Buyer’s Plan Repayment Period

Answer 17

You have 15 years to repay RRSP

Repayment period starts the second year after the year you withdrew the funds.
(If withdrawn in 2023, first year of repayment is 2025)

Question 18

Yearly Max Withdraw for Lifelong Learning Plan

Answer 18

Up to $10 000 in a calendar year to finance full time training or education.

Question 19

Who can participate in Lifelong Learning Plan

Answer 19

You, your spouse or common-law partner.

(Not your kids or spouse’s kids.)

Question 20

Lifetime Learning Plan Dollar and Time Limits

Answer 20

• $10 000 withdrawn per year
• $20 000 withdrawn total
• Start repayment January of the fourth calendar year after the year you made first LLP withdraw.
• 10 years to repay

Question 21

RRSP Contribution limit for 2024

Answer 21

$31 560 (up from $30 780 in 2023) or 18% of earned income.