As we approach key financial deadlines, it’s time to take a closer look at your Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP). These accounts offer excellent opportunities to grow your savings while enjoying significant tax benefits. Here’s everything you need to know to make the most of them.
RRSP Contribution Deadline for 2024 Tax Year
The deadline to contribute to your RRSP for the 2024 tax year is Monday, March 3, 2025. Contributions made by this date can be deducted from your taxable income for 2024, potentially reducing your tax bill.
Key Details:
Contribution Limit: For 2024, you can contribute up to 18% of your prior year’s earned income, with a maximum of $31,560. Any unused contribution room from previous years can also be carried forward.
Why Contribute? RRSPs allow your investments to grow tax-deferred until withdrawal, making them an excellent tool for retirement planning. Funds can also be used for specific purposes like purchasing your first home or furthering your education.
TFSA Contributions
While there’s no strict deadline for TFSA contributions, maximizing this account early in the year ensures you benefit from tax-free growth throughout the year.
Key Details:
2024 Contribution Limit: The annual limit is $7,000, and any unused contribution room carries forward indefinitely.
Why Contribute? Unlike RRSPs, investment income earned within a TFSA is completely tax-free—even when withdrawn—making it a flexible option for both short-term and long-term goals.
How to Take Action
Review Your Contribution Room: Check your RRSP and TFSA limits on your most recent Notice of Assessment or through the CRA’s online portal.
Plan Ahead: Ensure contributions are made well before the deadline to avoid last-minute processing delays. For RRSPs, aim to contribute by February 24, 2025, for timely processing.
Seek Professional Advice: Not sure how much to contribute or where to invest? Reach out to a financial advisor for personalized guidance tailored to your goals.
Don’t Wait—Act Now!
Making contributions to your RRSP and TFSA is one of the smartest moves you can make for your financial future. Whether you’re saving for retirement, a major purchase, or simply building wealth, these accounts provide unmatched benefits.
If you’d like to discuss these developments further or review your investment plan, feel free to schedule a meeting using our booking link. We’re here to help you navigate these changes and stay focused on achieving your financial goals.
This information has been prepared by Devon Ethier, MBA, CFP®, CIM® who is a Investment Advisor for iA Private Wealth Inc. Opinions expressed in this article are those of the Investment Advisor only and do not necessarily reflect those of iA Private Wealth Inc. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization.
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