Happy 60th Birthday RRSP

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Think about more than just contributing to your RRSP before the deadline


For 60 years, the Registered Retirement Savings Plan (RRSP) has become a valuable part of many investors’ wealth management plans. As the annual deadline for contributions approaches, we encourage you to do a more detailed check-up on your plan. Some of the items that should be reviewed may include:


 Beneficiary Designations – Ensure that you have an updated beneficiary designated in the plan documentation (in Quebec this designation must be made in your will or as part of a marriage contract). Understand that there may be tax consequences to your estate depending on who you have named as beneficiary and that there are special considerations that must be addressed if designating a minor child (which can vary depending on provincial or territorial laws), an individual with a disability (including the use of Registered Disability Savings Plans and Henson Trusts), or non-residents.


 U.S. Estate Tax – Currently, U.S. securities held within your RRSP could have U.S. estate tax implications, even if you are not a U.S. citizen. Depending on the facts of your situation, you may consider where your U.S. securities should be held (i.e., holding company) and your exposure to the U.S. market (i.e., directly through U.S. securities or indirectly through a Canadian mutual fund investing in the U.S.).


 Spousal RRSP – Taking into account your specific circumstances, you should determine if your family could benefit from the use of a spousal RRSP; or, conversely, whether you should be contributing to your own RRSP as opposed to a spousal RRSP. For couples facing the prospect of having one spouse earn a high level of income in retirement while their partner has little or no source of retirement income, income splitting through a spousal RRSP may provide additional tax benefits beyond pension income splitting.


RRSP Reminder:


RRSP contributions for the 2016 tax year must be made by March 1, 2017. Contribution limits are 18 percent of previous year’s earned income, to a limit of $25,370 for the 2016 tax year, less any Pension Adjustment (PA) for members of a registered pension plan or deferred profit-sharing plan. This limit will increase to $26,010 for the 2017 tax year.


If you need assistance with any RRSP matters, please don’t hesitate to get in touch.