Maximize your annual contribution


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:

Close this window