Using Tax Deferral to help Your Retirement

tax deferral grant thorton kelowna2009 is over and 2010 is here. As we enter the new year we are all recovering from our Christmas financial misadventures, and making new years resolutions for better financial plans for the coming year. The question this time of year is do you contribute to your RRSP?

It is hard to believe The RRSP was created by government in 1957 to encourage individuals to save for their own retirement. Even after more than 50 years many still are unsure of the tax benefits of investing using an RRSP.

To better answer this quest let me introduce you to guest contributor to Gary Schlenker, Manager with Grant Thornton LLP Kelowna on the tax benefits of an RRSP.

Tax Tip - How to make the most effective use of your RRSP.

  1. If you make regular contributions to an RRSP, consider applying to have your income tax withholdings reduced on your paycheque, which will improve your monthly cash flow. To do this, simply submit Form 1213 to the Canada Revenue Agency for authorization. Once authorized, your employer will be able to reduce the amount of taxes withheld from your pay.
  2. Even though your RRSP administration fee is not tax deductible, you should consider paying it directly, instead of from inside your RRSP – this helps maintain capital in your plan, allowing it to grow on a tax-deferred basis.
  3. You don’t need to deduct your contribution in the year it is made, If you are expecting to be in a higher tax bracket in the future, consider delaying your deduction until that time – you will receive a larger tax saving if the deduction is taken when you’re in a higher tax bracket.
  4. Considering filing tax returns for children or other low-income earners to creat contribution room that can be used in the future.

For more tax tips, visit our website at or contact Gary Schlenker at our Kelowna office at the addresses below.

Grant Thornton

Telephone: 250-712-6892


Thanks again to Gary from Grant Thornton Kelowna.

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1 Response to "Using Tax Deferral to help Your Retirement"

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Squawkfox Says....

I've used Form T1213 for many years -- it's a great tip. Sure, getting a tax refund is nice, but giving the Gov. an interest-free loan every year really ads up!

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