2020 RRSP & 2021 TFSA Contributions

2020 RRSP & 2021 TFSA Contributions

Here is a friendly reminder of the contribution limits and cut-off dates for RRSP and/or TFSA contributions if you are planning to make one this year, and have not already done so.

RRSP Contributions:
The cut-off date for your RRSP contributions to count toward reducing your income for 2020 is Monday, March 1, 2021. In order to meet this deadline, you should make your contribution by February 25th to allow for your deposit to clear your bank account. The 2020 contribution limit was 18% of your taxable income up to a maximum of $27,230, whichever is less. The 2021 contribution limit is $27,830. If you have unused contribution room from previous years, you may contribute more than the maximum, but one needs to be careful not to over-contribute.

TFSA Contributions:
If you would like to contribute to a TFSA for 2021 the limit is $6,000 for the year, unless you have not maxed out your contributions. The maximum one could have deposited into their TFSA account since 2009 is $75,500 as of 2021.

Contributions can be made through one of the following methods:

Transfer from Non-Registered Account: If you have a Non-Registered account set-up with enough funds in it, you can simply send us an e-mail indicating the amount you would like transferred from this account to your RRSP or TFSA. Instructions must be sent to us by 11:00am on Thursday, February 25 in order to meet the deadline.

Online Banking Transfer (Bill Payment): Add your Custodian (“Credential Securities” or “National Bank Financial”) as a “Payee” through your online banking and enter your account number as the bill account number. If you need assistance finding your account number or are unsure who your Custodian is, please contact our office. If you choose this method, please also notify us with the amount you are contributing, so we can have your Portfolio Manager watch for it. Please note this must be submitted before midnight on Friday, February 26 in order to meet the deadline.

EFT from your Bank: You will just need to sign an EFT form if you have not already done so, which allows your Custodian (Credential or NBIN) to take the money directly out of your account with your consent. Once you have signed the form, we will require an email from you indicating the one-time amount you are authorizing them to withdraw from your bank account and which account you would like it deposited to. We must receive these instructions by Thursday, February 25 at 3:00pm at the latest in order to process in time.

If you have any questions or would like to book a video or phone appointment to review your accounts, please contact our office.

USING YOUR RESP ACCOUNT

USING YOUR RESP ACCOUNT

When the time comes to withdraw from your RESP, most people have many questions. There are a few things to keep in mind when you wish to withdraw money for your student. Watch our video below to learn more:

First, let’s review some of the terminology.

When making contributions to your RESP, most people will earn CESG – Canada Education Savings Grants. That’s the 20% grant the government applies to certain contributions. When you withdraw from the RESP, the grants and the growth are described as EAP – Educational Assistance Payments. Both the grants and the growth are taxable when withdrawn.

There is another portion of the RESP called “Post-Secondary Education” withdrawal, or PSE. This is comprised of your contributions, and is not taxed when withdrawn.

A third term you should be familiar with is a “Proof of Enrollment”. This is needed every time your student makes a withdrawal from the RESP. It must include:

  • the student’s full name
  • the name of the institution they are attending
  • the semester start date
  • the year of the program and other information

There are many acceptable proof of enrollment documents, but most commonly we receive a letter from the registrar, an official timetable, or a tuition invoice. A letter of acceptance does not provide valid proof of enrollment.

There are limits on the EAP that can be withdrawn when your student begins their post-secondary program, and these depend on the qualifying time your student is enrolled for. However, once your student is enrolled, there are virtually no limits on how much of your contribution you can withdraw.

It is helpful to try to anticipate how likely your student is to earn additional income throughout their post-secondary careers.

When you withdraw EAP on behalf of your student, this money is taxable to them. We find that generally students will work less in their first two years of study as they often will be trying to get a handle on what university life is like.

In years where your student is earning less income, it may be beneficial to focus on withdrawing the taxable portion of the RESP. Additionally, should your student complete their studies and not need the full value of the RESP, it is much easier to withdraw your own contributions than it is to withdraw remaining grant and growth.

Knowing how to effectively use your RESP is not something you need to manage on your own. Providing the information discussed to your advisor will help us create a strategy for you to help minimize taxes and maximize the benefit of your RESP. For information please contact us.

2019 RRSP & 2020 TFSA CONTRIBUTIONS REMINDER

2019 RRSP & 2020 TFSA CONTRIBUTIONS REMINDER

This is as a friendly reminder of the contribution limits and cut-off dates for RRSP and/or TFSA contributions.

RRSP Contributions:

The cut-off date for your RRSP contributions to count toward reducing your income for 2019 is Monday, March 2nd, 2020. In order to meet this deadline, you should make your contribution by February 25th to allow for your deposit to clear your bank account. The 2019 contribution limit was 18% of your taxable income up to a maximum of $26,500, whichever is less. The 2020 contribution limit is $27,230. If you have unused contribution room from previous years, you may contribute more than the maximum, but one needs to be careful not to over-contribute.

TFSA Contributions:

If you would like to contribute to a TFSA for 2020 the limit is $6,000 for the year, unless you have not maxed out your contributions. The maximum one could have deposited into their TFSA account since 2009 is $69,500 as of 2020.

Contributions can be made through one of the following methods:

Transfer from Non-Registered Account: If you have a Non-Registered account set-up with enough funds in it, you can simply send us an e-mail indicating the amount you would like transferred from this account to your RRSP or TFSA. Instructions must be sent to us by 11:00am on Tuesday, February 25th in order to meet the deadline.

Online Banking Transfer (Bill Payment): Add your Custodian (“Credential Securities” or “National Bank Financial”) as a “Payee” through your online banking and enter your account number as the bill account number. If you need assistance finding your account number or are unsure who your Custodian is, please contact our office. If you choose this method, please also notify us with the amount you are contributing, so we can have your Portfolio Manager watch for it. Please note this must be submitted before midnight on Saturday, February 29th in order to meet the deadline.

EFT from your Bank: You will just need to sign an EFT form if you have not already done so, which allows your Custodian (Credential or NBIN) to take the money directly out of your account with your consent. Once you have signed the form, we will just require an email from you indicating the one-time amount you are authorizing them to withdraw from your bank account and which account you would like it deposited to. We must receive these instructions by Friday, February 28th at 3:00pm at the latest in order to process in time.

If you have any questions or would like to book an appointment to review your accounts, please contact our office at 780-490-4200.

RRSP DEADLINE REMINDER

RRSP DEADLINE REMINDER

This is a friendly reminder that the cut-off date for making RRSP contributions which count towards reducing your income for 2017 is March 1st, 2018Please note that in order to ensure any last minute contributions count towards this deadline, we will need to receive your instructions or deposits prior to this date. Below is a list of the different methods of making your contribution as well as the deadlines for each method.

Transfer from Non-Registered Account: If you have a Non-Registered account set-up, you can simply send us an e-mail indicating the amount you would like transferred from this account to your RRSP. Please allow for 3-4 business days for the money to transfer between accounts, so we should receive this request by Monday, February 26th at the latest.

Online Banking Transfer: Simply add your Custodian (Credential Securities or National Bank Independent Network) as a “Payee” through your online banking, and include your account number. If you need assistance finding your account number or are unsure of your Custodian, please contact our office. If you choose this method, please also notify us with the amount you are contributing, so we can have your Portfolio Manager watch for it. Please note it can take 3-4 business days for the funds to transfer from your bank account to investment account, so this should be done on Monday, February 26th at the latest.

EFT from your Bank: You will just need to sign an EFT form if you have not already done so, which allows Credential/NBIN to take the money directly out of your account with your consent. Once they have the signed form, we will just require an email from you indicating the one-time amount you are authorizing them to withdraw from your bank account and which account you would like it deposited to. We must receive your instructions for this method by Wednesday, February 28th at Noon (MST) at the latest in order to process in time.

Cheque: Please make your cheque payable to your Custodian (Credential Securities or NBIN) and either mail it to us or drop it off at our office. We must receive your cheque in our office by Wednesday, February 28th at Noon (MST) at the latest in order to process it in time. We will notify you once we have received your cheque and will courier it to your Portfolio Manager, who will then deposit it. It is also important that the name on the cheque matches the name on the account that the contribution is going to. Otherwise, an additional letter of direction may be required to allow for the deposit.

Should you have any questions or require our assistance, please don’t hesitate to contact us at 780-490-4200.