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RRSPs are just one part of your retirement income


 

RRSPs are just one part of your retirement income


When calculating the right amount to contribute, it’s helpful to consider whether you can expect to receive additional income in retirement from sources other than your RRSP (which will be converted to a RRIF). Your retirement income may include money from: the Canada Pension Plan (CPP), any other pension plans you’re a member of, Old Age Security (OAS), and any businesses you may be running post-retirement.


Let’s say you’re getting retirement income from your RRSP, as well as CPP and OAS payments. And you’re also selling vintage 2021s fashion on Etsy. Your income each year will look like this:


Example

RRIF + OAS + CPP + Etsy = Retirement Income


Suppose your Etsy store does really well — today’s young people are crazy about the clothes their grandparents wore back in the 2010s. It could be the case that your income adds up to an even bigger paycheque than you were earning before you retired, pushing you back into a higher tax bracket. Suddenly, your tax savings are nil.


This is why it’s helpful to talk about your options for retirement, to find out how you may be able to maximize your tax savings. There are a lot of factors to take into account — for instance, minimum annual withdrawal amounts from your RRIF, and OAS clawback. We can help you project this into the future and plan where to put your savings.

 

Who can contribute to an RRSP?


You can contribute to an RRSP if you:

  • Have earned income

  • Have a social insurance number

  • Filed a tax return

  • Have RRSP contribution room available

  • Are under 71. The end of the year that you turn 71 is your last opportunity to contribute.

Figuring out how much to contribute to your RRSP is important. Do it right, and you maximize your tax savings now, while setting yourself up for a good income after retirement. Do it wrong, and you could find yourself paying more taxes than you have to.

 

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MOSBY - 610, 4838 Richard Rd. SW Calgary, AB, T3E6L1

Mosby and its affiliated entities, including Mosby Insurance Agencies Ltd., Mosby Group, Mosby Company, and Mosby, are committed to a client-first approach, focusing on the needs of individuals over institutions. We empower you to create your future through trust, collaboration, and unbiased professional advisory. Independence is not just the end goal; it is the process.

The information provided is based on current (2024) regulations, laws, and all additional rules applicable to Canadian residents and is accurate to the best of our knowledge as of the date of publication. This information is general in nature and should not be relied upon as a substitute for individual advice in any specific situation.

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