Note that the $2k overcontribution can NOT be deducted for tax purposes. It can still go to your RRSP as an overcontribution and grow tax deferred - so if you are maxed on TFSA with strategy still makes sense.
So plz clarify then that I hypothetically don't get a "$2k over" RSP deduction in YR 1, but do get a $2k pension deduction only if I place it in RIF in YR 2?
ADAM, you are reaching thousands of Canadians that appear to really appreciate your information, strategies and tips.....you are doing a really good job!💯 👍🇨🇦
What borrowing about for an RRSP? My thought is, our child will be 15 this summer, the last year to get CCB is when they are 17. So a larger RRSP contribution would lower the family income and would help us get a larger CCB monthly payment. And probably actually qualify for BC Climate Action Tax Credit & maybe GST credit too.
Paul - this is something way to many people with kids overlook. My wife and I plan larger RRSP deposits now not based solely on our income, but on the CCB. We have 4 young kids, and every $1000 of RRSP deposit makes a big difference for our CCB. Glad more people are thinking about this - well done!
You mentioned the RRSP deadline, but made no mention of regular weekly or monthly contributions. By making these small sum contributions consistently throughout the year, you avoid last minute scrambling (and possibly having to borrow), but you can take advantage of dollar cost averaging.
I would like to hear opinions on the best idea to retire in December 2021 or January 2022. I will be 65 in 2022 and wife turning 61. I'm maxed out on TFSA and will max out wife in January 2022.
Hello PW: If I am not mistaken, in the vid you mention that contributing to a DB pension results in a Pension Adjustment. Doesn't a contribution to a DB or DC pension lead to a PA?
@@ParallelWealth Really? I have never run into that. I started in the biz 21 years ago doing nothing but Group RRSPs. I have another RRSP tip that I will send you that I have used only once. My client's The tax prepper thought I was crazy but it worked like a charm. I will lay it out so and you can use it 'cuz it's public domain. Regards, mj
Are we allowed to do short-term trading within the RRSP account? I know it is not allowed to do that within the TFSA account. Of course, we are free to do the trading within our margin accounts. However, to qualify for the capital gain, do we have to keep the stocks more than a year? Thanks for your explanation if you have time.
@@ParallelWealth Thanks for your reply, Adam. In the United States, a full year to keep a stock is required to qualify for the capital gain (50% subject to tax). If it is less than a year, the gain will be 100% taxable. Is this the same in Canada? It is assumed that the stock is invested in a margin (a non-RRSP account).
You should be telling people to invest their money into an RRSP weekly or monthly, instead of a big chunk at the end of the year. It lets your investments grow for much more time. $500 invested in January gets 11 months extra to grow.
Yes ongoing contributions are the best. For people with fluctuating incomes the lump sum at year end is often best tax strategy. Definitely recommend for most people to do a monthly/weekly contribution.
I am going have large Capital Gains in 2021. Contribution to a Spousal RRSP will help with my tax bill next year? Wife will be low income in retirement. I did start the Spousal RRSP contribution bi-weekly.
I don't believe there is an age limit on RRSP accounts. Would it ever make sense to set up an RRSP for each of your children and use the $2k over contribution limit to jump start their savings?
Scott there is no age limit but you have to have employment income to set one up. So depending on your kids age. And no, I would definitely not do this. What if they accidently use it down the road as an adult or need to use it. Just not smart to burn it now. Much like when parents use their kids capital gains exemption... It's a good thought, but I would advise not to.
When I filed my tax return for 2020.. It says my Rrsp contribution room is 35000. So Is it ok if I contribute this amount now and contribute 18% of 2021 income b4 March deadline.. Is it a good idea to save tax.. as I am expecting a good income this year..Hope you can advise.
The video says you’ll get $766 tax savings by taking advantage of the $2000 one-time over contribution allowance. That is not correct. You will not be allowed to deduct that amount from your taxes so there is no immediate savings. You acknowledge that in a comment but I suggest you edit your video; not everyone reads comments and it damages your credibility.
Note that the $2k overcontribution can NOT be deducted for tax purposes. It can still go to your RRSP as an overcontribution and grow tax deferred - so if you are maxed on TFSA with strategy still makes sense.
So plz clarify then that I hypothetically don't get a "$2k over" RSP deduction in YR 1, but do get a $2k pension deduction only if I place it in RIF in YR 2?
ADAM, you are reaching thousands of Canadians that appear to really appreciate your information, strategies and tips.....you are doing a really good job!💯 👍🇨🇦
I recently came across your videos. Explained everything in great details thank you.
Glad you like them!
I just found this channel as well. Excellent videos and explanations.
I’m tempted to become a client.
What borrowing about for an RRSP? My thought is, our child will be 15 this summer, the last year to get CCB is when they are 17. So a larger RRSP contribution would lower the family income and would help us get a larger CCB monthly payment. And probably actually qualify for BC Climate Action Tax Credit & maybe GST credit too.
Paul - this is something way to many people with kids overlook. My wife and I plan larger RRSP deposits now not based solely on our income, but on the CCB. We have 4 young kids, and every $1000 of RRSP deposit makes a big difference for our CCB. Glad more people are thinking about this - well done!
Hi Adam, is pension income tax credit available every year and the amount is 2000? Thank you.
Yes, it is - past age 65
You mentioned the RRSP deadline, but made no mention of regular weekly or monthly contributions.
By making these small sum contributions consistently throughout the year, you avoid last minute scrambling (and possibly having to borrow), but you can take advantage of dollar cost averaging.
To take out the 2k tax free from rif is their an age limit say 60 to 70 or any rules for this credit ?
Thank you
Thanks for watching!
Can you do a video on LIRA's soon please
The RRSP contribution room is calculated as 18% of your EARNED income (subject to the maximum) which may be a different number than your total income.
Wondering why the 2k put into RIFF would be tax free. Would you elaborate please?
Thank you for all the wonderful content!!
the first $2000 dollars of pension income in a year isn't taxed
@@kcirdorb9591 thanks!
I would like to hear opinions on the best idea to retire in December 2021 or January 2022. I will be 65 in 2022 and wife turning 61. I'm maxed out on TFSA and will max out wife in January 2022.
If you can afford to retire, then do it. Make sure the numbers add up and the income matches what your retirement goals are.
Can you please do a video on how RRSP compounding works in detail? Thanks
Added to the list
Does the $2000 pension income from a Defined Benefits Pension income eligible for the pension credit? Thanks.
sure does
Hello PW: If I am not mistaken, in the vid you mention that contributing to a DB pension results in a Pension Adjustment. Doesn't a contribution to a DB or DC pension lead to a PA?
Correct. Some DC plans create a PA, some create straight RRSP contributions slips.
@@ParallelWealth Really? I have never run into that. I started in the biz 21 years ago doing nothing but Group RRSPs. I have another RRSP tip that I will send you that I have used only once. My client's The tax prepper thought I was crazy but it worked like a charm. I will lay it out so and you can use it 'cuz it's public domain. Regards, mj
As a teacher I have practically no room for RRSPs. Put into a TFSA?
Yes, once RRSPs are maxed look to use a TFSA.
Are we allowed to do short-term trading within the RRSP account? I know it is not allowed to do that within the TFSA account. Of course, we are free to do the trading within our margin accounts. However, to qualify for the capital gain, do we have to keep the stocks more than a year? Thanks for your explanation if you have time.
No set rule on this, but no need to keep a stock for a full year.
@@ParallelWealth Thanks for your reply, Adam. In the United States, a full year to keep a stock is required to qualify for the capital gain (50% subject to tax). If it is less than a year, the gain will be 100% taxable. Is this the same in Canada? It is assumed that the stock is invested in a margin (a non-RRSP account).
You should be telling people to invest their money into an RRSP weekly or monthly, instead of a big chunk at the end of the year. It lets your investments grow for much more time. $500 invested in January gets 11 months extra to grow.
Yes ongoing contributions are the best. For people with fluctuating incomes the lump sum at year end is often best tax strategy. Definitely recommend for most people to do a monthly/weekly contribution.
I am going have large Capital Gains in 2021. Contribution to a Spousal RRSP will help with my tax bill next year? Wife will be low income in retirement. I did start the Spousal RRSP contribution bi-weekly.
Smart move.
Does this $2k over contribution work if you are not 65 yet?
Yes.
I don't believe there is an age limit on RRSP accounts. Would it ever make sense to set up an RRSP for each of your children and use the $2k over contribution limit to jump start their savings?
Scott there is no age limit but you have to have employment income to set one up. So depending on your kids age. And no, I would definitely not do this. What if they accidently use it down the road as an adult or need to use it. Just not smart to burn it now. Much like when parents use their kids capital gains exemption...
It's a good thought, but I would advise not to.
When I filed my tax return for 2020.. It says my Rrsp contribution room is 35000. So Is it ok if I contribute this amount now and contribute 18% of 2021 income b4 March deadline.. Is it a good idea to save tax.. as I am expecting a good income this year..Hope you can advise.
The video says you’ll get $766 tax savings by taking advantage of the $2000 one-time over contribution allowance. That is not correct. You will not be allowed to deduct that amount from your taxes so there is no immediate savings. You acknowledge that in a comment but I suggest you edit your video; not everyone reads comments and it damages your credibility.