Thursday, January 2, 2014

The RRSP contribution deadline is March 3, 2014

Monday, March 3, 2014 is the deadline to make RRSP contributions for the 2013 tax year. If you haven’t made a contribution yet, or if you’re looking to top up your contributions for 2013, now is the time to do so.

Why is it a good idea to make a contribution this year? Consider this: Canadians are living longer lives than ever before. The average life expectancy for Canadian men is nearly 79, while the average for women is over 84. When you couple that with the fact that many Canadians are retiring early these days, it’s not unusual to expect a retirement period of upwards of 30 years. Plus, if you plan to retire at age 55, you will have to bridge the gap between that date and the start of your Canada Pension Plan (at age 60) and the start your Old Age Security (at 65).

Saving enough money to provide yourself with an adequate retirement income is not something you can afford to leave until the last minute, especially because in today’s low-interest rate environment, double-digit annual rates of return on your investments appear to be a thing of the past.

If you would like to make a contribution before the March 3 deadline, please stop by one of our branches today. We will be happy to assist you.

Am I too young to bother contributing to an RRSP?

If you have just entered the workforce, retirement may seem a long way off. So far off, in fact, that you may be wondering if you need to bother contributing to a registered retirement savings plan (RRSP) yet.

The short answer to that question is this: it’s never too soon.

Anyone 18 years of age or older can contribute to an RRSP and the earlier you start, the more you’ll maximize your contributions. One of the big advantages of RRSPs is that your contributions entitle you to a tax deduction and generate investment income that isn’t taxable until it’s withdrawn (usually at a lower rate because retirement income is generally lower). The interest earned on your contributions also compounds, meaning the sooner you make contributions, the longer they’ll have to compound and grow.

Each year, you can contribute up to 18 per cent of your income (less the pension adjustment), up to a maximum of $22,000 annually.

When contributing to an RRSP, you can choose from many different investment options, including investment funds, guaranteed interest funds, stocks, bonds and more.

If you have never contributed before and you’re interested in learning more about RRSPs and your investment options, please contact North Winnipeg Credit Union at (204) 954-7450 or stop by one of our branches. We will be happy to help you get a jump start on your retirement planning.

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