RRSP Tips And Tricks: Maximize Your RRSP For Retirement

In this video we'll go through some RRSP tips and tricks that will help you maximize your RRSP for retirement.
If you have any further questions about this video's topic or any financial planning questions in general, I encourage you to find a certified financial planner in your area or book a consultation with us to get your retirement plan on track.  You can learn more about our services at www.parallelwealth.com/planning
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OUTLINE
0:00 - Intro
0:16 - Contribution Limit
0:48 - Do RRSPs Make Sense?
3:24 - Carrying Forward Deductions
4:20 - Spousal RRSPs
6:31 - RRSP Loans
7:24 - Invest!
7:48 - Employer Matching Programs
8:56 - Re-invest Tax Refund
This presentation is intended for information purposes only and does not constitute an offer to buy or sell our products or services nor is it intended as investment and/or financial advice on any subject matter. Every effort has been made to ensure the accuracy of its contents. Certain of the statements made may contain forward-looking statements, which involve known and unknown risk, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Returns are not guaranteed and past performance may not be repeated.
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DISCLAIMER: The videos and opinions on this channel are for informational and educational purposes only and do not constitute investment advice. Adam Bornn is not registered to provide investment advice and as such does not provide recommendations - those looking for investment advice should seek out a registered professional. Adam is not responsible for investment actions taken by viewers and his content should not be used as a basis for investment trades.
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[@ddavidson5]

Regarding the RRSP loan... What I did for many years to max out my RRSP was: Through monthly contributions, save half of my total RRSP annual contribution room and then in late February use an RRSP loan for the other half to max out my RRSP annual contribution. When my tax refund arrived 6 weeks or so later I used my refund (plus a small amount from my regular savings) to pay off the RRSP loan in full. For only a small amount of interest I was able to max out my RRSP each and every year, in fact I never had any RRSP carry forward. Worked like a charm for me and for some others that asked me how I was able to max out my RRSP.

[@rocksnowandwater]

Hi Adam, love your videos. One thing that was not addressed: What about too large of an RRSP account at retirement? Say I'm earning 150k per year, and at retirement my RRSP account is at 4 million. My RRIF income in retirement will greatly exceed my current annual earnings, or I will have sizable taxation for the estate... Not to mention a complete loss of OAS. I'd love to see a video for us super savers.

[@lw1405]

Ding dong! That is a great way to describe a tax refund and I am going to use that! Its not free money- its your money that CRA has been holding on to. I have staff that always want to contribute additional tax off their paycheque rather than putting that same value into an RRSP. Even if they don't contribute to the Group RRSP matching plan. Its mind blowing.

[@garth217]

Adam, another great video. Sometimes your topic is not actually relevant to my situation but it always adds to my knowledge. Frequently it adds to a previous subject as these things are always linked at the end..either now or in the future.

[@ParallelWealth]

Thanks Garth.

[@Coyotehello]

Great episode thank you. As self employ I (we) do not contribute to TRA every pay cheque but one lump sum at year end so, I still do not understand how today a RRSP loan make sense. It did 30 years ago but now???

[@mrhvp1]

As always, another great video. been watching for a long time and have used your information to build our retirement plan. My better half is 11 years older than I and is retired, she will be 65 in November. I am 54 this year and will continue to work until 60. I have my RRSP contribution room all used and i have used some of it as a spousal so she can draw from them. We understand there's a 3 year withdraw rule but if i am not mistaken she can convert to a RRIF upon turning 65 and still withdraw the minimum 4% without penalty to me. This is a great way to get some lower tax income $$. Thanks for the Wealth of knowledge.

[@ParallelWealth]

Correct, min RRIF withdrawal does not have attribution rules.

[@CoveredCallETFInvesting]

Thanks Adam, on point as always.

[@ParallelWealth]

Thank you!

[@Magnum-uf3gg]

Thanks for another great video! I'm sure glad I found your channel. You have great advice for a newer investor. I contribute to the spousal rrsp as i make around 95 and my wife is semi retired, it seems to be the best for us. Thanks

[@ParallelWealth]

Fantastic!

[@netgenrb]

Government raises taxes (full stop). I have long assumed that, barring some anomoly, my tax rate whrn I need the money will be higher than when I ttake the deduction, and yes I know that money shuold be incrreasing inside the RRSP, but inflation will eat away some of that gain. From my viewpoint, it's only really useful if you have occaisional large spikes in your income where a your tax rate will spike for a year now and then. Just a thought -

[@neilbertram1922]

Another great video. Thanks. Here's an interesting question: I have been making RRSP contributions for the past few years, but not claiming the deduction. My plan is to save the deduction for an unexpected income year (e.g. commuted pension). Is there a limit to how far forward you can carry that deduction? Can I still be using unused RRSP deduction amounts in my 70s?

[@lawrencek5875]

Good video man, some good points and you know what you are talking about - Thank-you

[@ParallelWealth]

Thanks for watching!

[@roberttaylor3594]

I decided to move 'growth ' stocks from my YFSA to a RRSP. Disney, for example. I consider it solid...but not much of a dividend, CP is another example. MTAV ETF too, maybe and ETHI. good businesses I feel I can count on in the ETFs but the dividend is low- non-existent. moved them when they were 'in the green' in the TFSA. I'm in a higher tax bracket than usual these days...a temporary situation, unfortunately ;). Leave the dividend stocks in the TFSA where I can access the dividends at will...and leave the growth stocks in the RRSP.

[@truthandnothingbut]

This was great ty

[@GulzadaIlipbaeva]

Hello Adam, thank you for the great video! One question: can my husband transfer from his individual RRSP he has had for 3 years now to the newly created spousal RRSP we made this year to have common money? Can I do the same with mine? And how can this affect our RRSP in general? Again, thank you so much! The individual RRSPs we have are in the banks, and the newly created one is with Questrade.

[@daytonfunk1835]

Question Adam, say I put a large sum of cash into an RRSP investment account two years ago. The markets went south and now there is a net amount that is only 75% of my deposit. When I withdraw my RRSP is the 25% considered a loss and I’m only taxed on the 75% or do I pay tax on the original 100% deposited?

[@brianoconner3090]

Does it make financial sense if I do a transfer in kind from my TFSA towards an RRSP then use the tax refund from the RRSP to pay some line of credit debt currently at 10.15%? Or just reinvest than refund back to my TFSA? Thank you.

[@master15951]

I contributed ( this is Years back) Spousal RRSP When spouse had no earnings, but now that spouse earning more than Contributor.

[@cdnJGSL]

Can some of the funds already inside an RRSP be transferred to a Spousal RRSP (the spouse who have never worked in Canada)? The "main" RRSP is held by a 67 y/o (retired) with a spouse significantly younger...

[@RCML27]

If I'm 61 and retired and still have RRSP contribution room and my total gross income is around $60,000 and that puts me in the 2nd tax bracket (just like it was when I was working and will probably remain that way when I collect my OAS and QPP. Now collecting QPP disability pension and defined benefit pension.), is it still worth it to contribute enough into my RRSP to bring me into the 1st tax bracket, even though when it comes time to withdraw it it will bring me back to the 2nd tax bracket?

[@CodeAugur]

I would really love to see a video explaining some common uses of deferring RRSP contribution to a future year. I always hear the "you will make more next year" but if you make more next year, you should be able to put more away next year too. The only thing I could think of is if you contributed a lot at the beginning of the year then go on Mat/Pat leave so your total income for the year drops you into a lower tax bracket, you know you are going back to work next year and won't be able to contribute as much in the second half to make up for it. Please give any other examples that might make this tactic make sense. I was also wondering if this might be a good situation for Spousal RRSP: if you and your spouse make roughly the same salary but your spouse is going on Mat/Pat leave then their income will be lower for that year, does it make sense just for that year to contribute to a spousal RRSP?

[@Dom.Perignon123]

if i'm understanding your question, as a salaried employee, i generally know what my bi weekly chq is and amount of taxes i will pay. i contribute my max rrsp (after my pension adj) every year. Some years i work substantial OT; or if i have a lump sum back pay; or if i have acting assignments at higher levels/pay and that pushes me into a higher tax bracket. I will then use previous years' rrsp contributions that i didn't deduct to move me back into a lower tax bracket. If i would've deducted the rrsp contribution in year i contributed, it would have resulted in a lower savings percentage. By waiting, i earn more but am taxed at lower rate. In other words, if i'm in a 35% tax bracket most years and contribute, if i deduct, i'll save 35%. but if i do one of the things mentioned above and am in 45% bracket, when i deduct several years of previous year contributions, i'll be saving 45% and can push me back into 35% bracket

[@lazyhusband]

If you take so little out each year after you retire, sooner or later when you die, CRA will get you then.

[@AngelaV-mo3qx]

Another great video. My husband and I are fortunate to have a defined pension (we are both retired). We do have an investment property and wondering if we should consider putting $$$ in an RRSP when we sell (hoping to offset capital gains). How long do we need to keep the money in an RRSP before we covert to a RRIF? We are in our early 60’s and haven’t taken our CPP.

[@ParallelWealth]

That can be a great strategy. You can convert to RRIF immediately.

[@JMaki-mr2mh]

I did a rough side by side comparison of RRSP VS TFSA. It seems like TFSA comes out on top after 35 years and it also doesn't complicate tax situation. However, I try and reduce my taxes above 56k.

[@chiragupadhyaya4927]

What if both spouses max out their each RRSPs

[@DavidWilson-ps8gx]

Hello Adam, I have a quick question regarding continuing contribution to my RRSP in retirement to differ the tax implications. My wife and I still have room in our RRSP that we can contribute additional cash. I know we should be melting down our RRSP which we havw started and will continue because we plan on also differing our CPP AND OAS until 70 and 65 respectively. We both retired at 55 and are still pull a very good pension, with extra cash that we presently have on hand that could be placed into our TFSA. But we are wondering if we🎉 should put it in TFSA or RRSP, and we presently pension split as well. We both also have a defined pension plan from our previous employer. What would be your recommendation? Thank you

[@ParallelWealth]

Contributing to RRSP in retirement almost never would make sense from a tax standpoint. There will always be an exception, but generally not a good idea.

[@patassion]

I never made much money and was always at lowest margin. It was kind of like forced saving to me and I might not have saved as much if I was not forcing myself to buy RRSP. This year by Feb 29 for the 2023 year I am buying the last 3 thousand I can ever buy as I turn 71 in 2024. Back in the day there was no TFSA and maybe I would have saved differently.

[@jkquinn2010]

I like that idea about taking your income tax refund and rolling it back in to your savings. You said that you prefer to move it to tfsa but I didnt catch a reason why? Is there an advantage over putting it right back to your rrsp? Thanks!

[@ParallelWealth]

I like either - many haven't started to fund a TFSA, so a great way to start the process.

[@Sharon-si8ec]

If the TFSA already maxed out, does it make sense to contribute the RRSP refund into the taxable account?

[@ParallelWealth]

Yes, or put into RRSP if you have room

[@RobinReji1990]

Can I contribute more than the annual RRSP limit if I have the contribution room avalaible (let's say 80k$)?

[@patrickmcgowan1252]

yes

[@ParallelWealth]

You sure can. If you have carry forward room that can be used when you want.

[@brendanelson6631]

Any advice on how to withdraw a DPSP. I am 62 and will be leaving my employer. I have to move the money or re-invest on my own. Help!

[@ParallelWealth]

Likely will go to a LIRA, then to LIF when you start taking income.

[@AdamEarl2]

Does an employer contribution to your rrsp count as a deduction for the employee?

[@James_48]

Most often, matched RSP funds from your employer are considered a pension adjustment and appear as such on your T4 slip. This does not count towards your current tax year’s RSP contribution but it is used in the calculation for the following year’s contribution limit. You will see it on your Notice of Assessment.

[@TerriWiebe-hq3rz]

Maybe I misunderstood your question as per other response but if you are asking if it will lower your taxable income in that year, then yes. For example, i put in 100/month into my RRSP. My employer matches it. At the end of the year, I will have $2,400 in RRSP contributions which will decrease my taxable income by the full $2,400. It sometimes depends on the accounting software your employer uses as to whether the taxes taken off each paycheck will include the reduced taxable amount. The above will still apply but your tax refund may not be as high.

[@reds1122]

does RRSP make sense at 50k income bracket in BC?

[@ParallelWealth]

typically above $50k-$55k

[@stevewahrer3528]

Only question on your RRSP contribtion net benefit is why use Avg Tax Rate Vs. Marginal? Should be Marginal Vs Marginal as RRSP/RRIF income will inevitably be last dollar earned at marginal rate.

[@ddavidson5]

Because when you contribute to an RRSP it comes off the top, the income that was taxed at your top marginal rate. In my case my marginal tax rate was in the 45% range so you can look at it that my "overall" tax rate on just my RRSP contributions going in was 45% (and that I got back when I did my taxes). Now that I am retired and taking out that same money my "overall" tax rate on every dollar coming out is about 15% and that's what I send to the government for taxes. Of course some of that money is tax free and some is taxed at 30% or whatever. Either way, for the money I put in my RRSP, it was in at 45% and out at 15%.

[@stevewahrer3528]

@@ddavidson5 i appreciate that your avg rate is 15% but I would still suggest that the RRIF money is the last dollar earned vs OAS, CPP, PENSION etc so net benefit of RRSP should be 45% - 30% as you suggested. Still a benefit just think overstated. Perspective I guess.

[@ddavidson5]

@@stevewahrer3528Well, I deferred both my CPP & OAS to age 70 so that reduced the taxes on my RRIF withdrawals for that period. Last year I started my CPP & OAS and reduced my RRIF withdrawals by a corresponding amount so, overall, I am still paying taxes at a similar level. RRIF, CPP, OAS, it makes no difference, income is income and it's all in how you manage it, something that Adam often talks about in his videos.

[@ddavidson5]

@@stevewahrer3528 Well, I deferred both my CPP and OAS to age 70 (I don't have a work pension) so that helped reduce the taxes on my RRIF withdrawals during that period. Last year I started my CPP & OAS and I reduced my RRIF withdrawals by a corresponding amount so I am paying taxes at a similar rate.. CPP, OAS, RRIF -- it's all income no matter the source and it's all in how you manage it. I look at my total income and my overall tax rate and that's what I send to the government. Certainly I don't look at that my OAS is tax free, my CPP is taxed at 10% and my RRIF withdrawals are taxed at 25% (or whatever). I could just as easily say that my RRIF income is tax free while my OAS & CPP are taxed more. Either way I am pulling out my RRIF money and the taxes I owe on those withdrawals is still far less than what I put it in at. It seems to me that what matters in retirement is how much tax you are paying overall (and I believe is Adam''s point)

[@breezybre2670]

The main problem with an RRSP comes if/when Canada stops allowing income splitting after 65. When that happens we are hooped as our income shoudk be more than it is now. I'm certainly not planning on being poor in retirement .

[@stevewahrer3528]

Hence a Spousal RRSP is only way to guarantee income splitting.

[@breezybre2670]

@@stevewahrer3528 ok...that makes sense now. Question though...are defined benefit pensions such as the federal government pension...splittable before age 65?

[@tutorknights]

Do not use RRSP until you have maximum number of kids you will have.

[@debbielockhart7762]

Why?

[@tutorknights]

Because each dollar you put into RRSP increases your Canada child benefit by the reduction rate which is higher for more kids. So my 43% tax bracket is effectively 52% with the CCB. Best time to contribute but I maxed out my contributions back when I paid 21%.