BJK Financial Group Blog

Yes, it’s time to finalized our RRSP contributions for another year

Well, it’s time once again to finalize our income taxes and that includes reviewing and topping up our RRSP contributions for the previous tax year. So, as you look over your tax bill for 2023, I want to help you think a few things over. There is so much information out there that seems contradictory and can end up just confusing you. I would like to think that I can help you make sense of it.


How much money do I need?

One of the most common questions I get from clients is: “How much money do I need to put into my RRSP for retirement?” It’s a sensible question and here’s a sensible answer.


If you look at the income statement I have included here, you will see a trial account with $700,000. This account is set up with monthly withdrawals of $3,000 and an expeceted rate of return of 5%. This is a reasonable rate of return to count on over the long haul. As all of us know, rates of return our investments constantly fluctuate and are affected by many factors. Some of those factors are within our control and some are not. It’s what makes so much of this so “interesting”.


As you can see from this test result there is enough money in the account to last for 30 years - in this scenario from age 65 to age 95. Of course, this would not be your total income as you will also have CPP, OAS, and whatever money you can find stuck between the cushions of the couch.  


As you can also see, this is based on a tax rate of 35%. It’s important to point out here that when you take money out of your RRSP it is considered taxable income. The reason we scramble to put money into our RRSPs at this time of the year is that any money set aside deducted from our taxable income for the current tax year, up until the end of February of the following year. Money put aside in an RRSP is considered deferred tax money, and when you take that money out during retirement, then you will have to pay the tax on it then.


That’s different from a TFSA (Tas Free Savings Account). Money you put into your TFSA does not affect your taxable income for that year, so you don’t have to run around putting money into it just before tax time. Just like your RRSP none of the savings that build up in the plan are taxed. But the difference is that when you eventually take money out of your TFSA, you do not have to pay any income tax on it, no matter whether we are talking about the original principal or any increased savings that have built up since.


Here is a retirement income calculator you can use to get an even better idea of where your savings are and how well you might be doing in comparison to what you hope to achieve.


Every case is different. Let’s talk.

I know this is just the beginning. While you may be in a hurry to make this year’s RRSP contribution in time for your 2023 tax return, it’s also important to set things up for the long haul. And we can work together on both those goals.


So, let’s get started. Give me a call at (519) 279-0186, email me at [email protected], or visit my website at I look forward to chatting with you.


Brian Kettles at 8:52 AM
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Brian Kettles
Name: Brian Kettles
Posts: 35
Last Post: April 5, 2024

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The comments contained herein are a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. This Blog was written, designed, and produced by Todd Race Copywriting for the benefit of Brian Kettles who is a investment fund advisor at BJK Financial Group a registered trade name with Investia Financial Services Inc., and does not necessarily reflect the opinion of Investia Financial Services Inc. The information contained in this article comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any securities.


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