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RRSP 101 (All RSP questions answered)

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Poll:RRSP 101 (All RSP questions answered)
Choice		Stats
I find this info useful, thanks.	83% (20)
this is basic info, i know this already!	17% (4)

frnd
Member since: May 07

Posts: 239
Location: GTA
Post ID: #PID

Posted on: 18-02-09 16:21:02

Thanks Pramod jee for the explanation.
______________________________

My 2007 notice of assessment tells me how much I can contribute to RRSP during 2008 (before 2nd March 2009). As per my understanding, when I contribute to RRSP in any bank, I get T4RSP from the bank at the end of the year so I can send it to CRA.

For 2009, if I contribute 10,000 on 3rd March and take the total amount out after 90 days under HBP. At the time end of 2009 (or Feb-2010) when I get T4RSP from the bank, what it will say as there won’t be any money in my RRSP account?

Thanks

Pramod Chopra
Member since: Sep 03

Posts: 1284
Location: Pickering, ON
Post ID: #PID

Posted on: 18-02-09 17:08:01

Quote:
Originally posted by kisi143

Dear Pramod ji,
Could you please check your PM.
Thanks,
~K

Replied to your PM.

Cheers.

-----------------------------------------------------------------

Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada

Pramod Chopra
Member since: Sep 03

Posts: 1284
Location: Pickering, ON
Post ID: #PID

Posted on: 18-02-09 17:23:58

Quote:
Originally posted by frnd

Thanks Pramod jee for the explanation.
______________________________

My 2007 notice of assessment tells me how much I can contribute to RRSP during 2008 (before 2nd March 2009). As per my understanding, when I contribute to RRSP in any bank, I get T4RSP from the bank at the end of the year so I can send it to CRA.

For 2009, if I contribute 10,000 on 3rd March and take the total amount out after 90 days under HBP. At the time end of 2009 (or Feb-2010) when I get T4RSP from the bank, what it will say as there won’t be any money in my RRSP account?

Thanks

You are welcome.

If you contribute before March 2009 the bank or your financial institution would send you receipt by 1st week of March, 2009 and you would have to report that contribution in your 2008 tax return. Whether you claim the deduction or not would depend on your available room. You will have to send a copy of the receipt along with your tax return if you file a paper return or keep it with you if you do a net file or efile.

What ever you contribute from 3rd March onward, your bank or financial institution may send you a consolidated receipt for the total amount contributed in the remainder of the year 2009 by early January, 2010 or individual receipts after every contribution and you would use those for your 2009 tax return.

The receipt states only the amount contributed and DOES NOT give you account balance or statement. If you withdraw money under HBP or otherwise and your balance in RRSP accounts become zero or nil, still you would receive the T4RSP receipts for the contributions you made for you to report them in your tax return.

I hope it makes things clearer.

-----------------------------------------------------------------

Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada

Pramod Chopra
Member since: Sep 03

Posts: 1284
Location: Pickering, ON
Post ID: #PID

Posted on: 18-02-09 17:50:28

Quote:
Originally posted by Blue_Peafowl

I will surely go see professional and discuss my situation

But i would still like to know the opinion from CD's so i hv better understanding and that can help me ask question to professional.

I am sure there is others have same thinking like mine and by bringing this up we are going to help others too.

OK.

So here is some general information regarding the options available to you.

Even though the name RRSP suggests that it is for your retirement but the money can be taken out from the plan any time and it can also be used as a good income splitting tool. Your post suggest that you are about 35 now and in the prime of your earning years which means you are in a higher tax bracket. Since you have at least 20 years with you, the RRSP would be a good vehicle for you for not only hefty tax refunds now but for savings and growth as well because the money grows tax sheltered till it is in the plan and only become fully taxable after you take it out. If you plan to stop working after 55 then it is even better as you would not have other incomes and what ever you start taking out from your RRSP would be taxed at a lower rate. Your Financial Planner, after discussions with you can put certain plans and strategies in place so that you can start taking money out from the RRSP plan starting around 5 to 7 years before you start to stop working by using RRSP melt down and also can use spousal RRSP plans to your benefits.

RESP is also a very good tool for tax sheltering and income splitting. Moreover, it gives you 20% free return for contributions up to $2500 every year per child. Where would you get this type of return on your investment. RESP has been discussed at this forum in quite detail.

In addition to these you can also take advantage of the new TFSA account where in you can deposit $5000 (each spouse) and earn interest or any type of income with out having to worry about paying any taxes on that. It sound like a small amount now but consider your case, where in 20 years you would be able to deposit a minimum of $200,000 (though it would be more as it is also indexed to inflation) and would earn tax free income there.

That’s the reason I suggested you to talk to a Financial Planner and discuss your unique situation and goals and take actions accordingly.

-----------------------------------------------------------------

Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada

frnd
Member since: May 07

Posts: 239
Location: GTA
Post ID: #PID

Posted on: 18-02-09 20:47:58

Quote:

You are welcome.

If you contribute before March 2009 the bank or your financial institution would ................ tax return.

I hope it makes things clearer.

Thanks again, Pramod jee. Planning to talk to you soon.

Bingo
Member since: Jan 07

Posts: 198
Location:
Post ID: #PID

Posted on: 18-02-09 22:09:19

So within RRSP where everyone is headed GIC ,Mutal Funds or Stocks considering what economy is going thru..?

ihpatel
Member since: Dec 03

Posts: 132
Location: Scarborough
Post ID: #PID

Posted on: 19-02-09 23:10:03

When I speak to one of my friend about spousal RSP, friend said that what happend if get divorced who own that RSP money ?

Contributors: investpro(34) Pramod Chopra(11) DP_gta(6) reachash(6) frnd(5) Mr.Scorpio(4) Ash20(4) TO-Puttar(4) Fido(4) regar(4) sallusworld(3) Big Vee(3) desiM(3) VJ(2) Val(2) Blue_Peafowl(2) Shah(2) Iceberg(2) pratickm(2) Toronto_Puttar(1) ihpatel(1) JRF(1) RESP(1) desipyare(1) sw33tc0rn(1) rajvikas(1) blabber(1) surtalme(1) Full House(1) sendneeraj(1) hchheda(1) sumjo(1) dp_jain(1) kisi143(1) rsbagwell(1) BlueLobster(1) Bingo(1) parth1970(1)

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RRSP 101 (All RSP questions answered)

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