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:

  • 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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