Saving and Investing
The beginning of a new year is often the time that individuals consider making contributions to their Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Account (TFSA). If this is something you are contemplating, here is some information you should be aware of.
Important RRSP information
To qualify as a 2018 deduction, contributions to your own or to a spousal RRSP must be made on or before Friday, March 1, 2019.
Your personal RRSP deduction limit can be found on your RRSP Deduction Limit Statement provided by the CRA on your most recent Notice of Assessment which can be accessed by logging into MyCRA.
The maximum amount is determined as follows:
- 2018: 18% of previous year’s earned income up to $26,230
- 2019: 18% of previous year’s earned income up to $26,500
- + (Plus) Pension Adjustment Reversal (PAR)
- + (Plus) Unused deduction room earned in previous years
- - (Minus) Previous year’s Pension Adjustment (PA)
- - (Minus) Current year’s Past Service Pension Adjustment (PSPA)
Important TFSA information
If you have previously fully utilized your TFSA contribution room, the maximum amount you can contribute into a TFSA in 2019 is $6,000.
If you have been both a Canadian resident and over the age of 18 since 2009, and have never made a TFSA contribution, you would be able to contribute $63,500 to your TFSA in 2019.
Otherwise, if you are 18 years of age or older and a Canadian resident, your individual contribution room is calculated as follows:
- The annual TFSA dollar limit ($6,000 for 2019); plus
- Any unused TFSA contribution room from the previous year; plus
- Total amount of withdrawals from TFSAs in the previous year (excluding qualifying transfers and withdrawals of TFSA “excess”).
You can request your individual TFSA contribution room by calling 1-800-267-6999 or by logging into MyCRA.
Get in touch with an ATB Financial Advisor to learn how you can best use your TFSA and RRSP to help reach your financial goals.
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