Deadline looms for 2011 RRSP contributions
Posted February 29, 2012 6:26 am.
This article is more than 5 years old.
Wednesday is the last day of February and if that doesn’t ring a bell you likely belong to a majority of Canadians who did not make any RRSP contributions this year.
A recent survey by Scotiabank found that just two in five Canadians — roughly 39 per cent — said they planned to contribute to an RRSP for the 2011 tax year.
That was down sharply from 53 per cent a year earlier.
Meanwhile, CIBC issued its own poll last week that found about one quarter of Canadians who planned to make a contribution this year still had not done so.
Half of them said they planned to wait until the final two days before contributing.
The decision to invest in an RRSP has been complicated in recent years by the introduction of tax-free savings accounts.
Although TFSAs don’t provide a tax deduction for money going in, money taken out later, including interest, dividends or capital gains is not subject to taxation.
RRSP contributions, on the other hand, are tax deductible going in but money taken out in retirement, including any gains, is subject to taxation.
Many banks and financial institutions are offering extended hours to give procrastinators extra time to make their contributions and some offer special interest rates on RRSP accounts.
