Maximize your annual contribution

Example:

You have saved up $2,000 for your RRSP contribution and are in a 40% tax bracket. You have two options:

1- You can contribute the $2,000 to your RRSP, in which case you will receive an $800 income tax refund that can also be invested in your RRSP. You will therefore have $2,800 in total savings.

2- You can take out an RRSP loan in order to maximize your RRSP contribution, so that you can repay your loan with your income tax refund, as follows:

RRSP contribution X tax rate	=	RRSP financing	=	= tax return
(1- tax rate)

Soit :	$2,000 * 40%	$1,333.33
	60 %

As a result:

• You will increase your contribution by $1,333.33 instead of $800
• You can repay your loan in full with your tax return
• You will have contributed $3,333.33 to your RRSP rather than $2,800
• You will enjoy the financial benefits that come with making higher contributions, which makes all the difference at retirement time!

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