The end of the current year and the beginning of a new year are often the times 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 important information you should know.

Important RRSP information

To qualify as a 2023 deduction, contributions to your own or to a spousal RRSP must be made on or before Thursday, February 29, 2024.

Your personal RRSP deduction limit can be found on your RRSP Deduction Limit Statement provided by the Canada Revenue Agency (CRA) on your most recent Notice of Assessment, which can be accessed by logging into My Account.

The maximum amount you can contribute to your RRSP is determined as follows:

• 2023: 18% of previous year’s earned income up to $30,780
• 2024: 18% of previous year’s earned income up to $31,560
  • + (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 2024 is $7,000, which is a $500 increase from 2023.

If you have been both a Canadian resident and over the age of 18 since 2009, and have never made a TFSA contribution, you will have accumulated TFSA contribution room of $88,000 in 2023 or $95,000 in 2024.

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 ($7,000 for 2024); 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 My Account.

For more information or to answer any questions, get in touch with an ATB Wealth advisor to learn how you can best use your TFSA and RRSP​ to help reach your financial goals.