Weekend Ramblings and PF Blog Love: Did you RRSP yet? Edition

Deadlines are looming again (FYI if you didn’t know it is February 29, 2012) for your contribution to be counted towards the 2011 tax year.

I’m curious to know (you know, because I’m nosy like that), for those that contribute to an RRSP,  when do you contribute?

Do you contribute in a lump sum in early 2011?
Do you contribute throughout the year in 2011?
Or do you wait until the first two months of 2012 to put in that big chunk of change in?

What I do (and there’s no rhyme or reason or method to my madness) is I contribute a set amount per month and then if I have room left over, I’ll contribute a lump sum to max out my RRSP afterwards.  After I finish paying back my Home Buyer’s Plan, I’ll likely stop contributing to my RRSP’s (unless I have oodles and oodles of money after contributing to my TFSA already) since I plan to have a defined benefit pension plan.  However, who knows, I might be desperate to decrease my taxes in which case I’ll probably contribute to an RRSP as well.

Speaking of RRSP’s, I had the lovely opportunity to talk to Bryan Borzykowski from Moneysense.ca (I idolize Money Sense so it was pretty awesome to be mentioned in it) and he interviewed me about my strategy for my RRSP’s.

Here are some RRSP posts that might pique your interest  in case you’re not sick of seeing RRSP stuff just yet.

Have a fantabulous weekend!

Pf Blog Love


Young is a writer and former owner of Young and Thrifty and the main "twitter' behind Young and Thrifty's twitter account. She lives in Vancouver, BC and enjoys long walks on the beach, spending time with her anxious dog, and finding good deals. If you like what you read, consider signing up for email updates.

27 Responses to Weekend Ramblings and PF Blog Love: Did you RRSP yet? Edition

  1. Thanks for the highlight! When do you think it’s best to put a wrap post together? I can never figure it out b/c when I publish new content on Friday, and since Fri/Sat/Sun are slower, I want the new content to be highlighted for all those days. Then Monday comes around…. and I only post 3.5X a week.

    Would you recommend I write shorter posts and write more content to fit more in?

    thx, Sam

    • @FS- I like to do mine on Friday :) I know you’re a fan of posting on the weekends though. I find that people look at blogs etc. when they are at work on M-F and on the weekends, most people are out or are busy. At least that’s what I’ve found.

  2. I don’t RRSP, but it looks like I’m waiting until the end of the year to Roth IRA. I’m worried about the income cap, so I’m going to hold out until the end of the year when I have an exact picture of how much I can contribute. I am SO jealous that your RRSP room is based on the previous year’s income, so it’s much easier to know how much you can contribute. Last year, I started out dollar cost averaging until I got a bonus in March and I went “Screw this – I’m just maxing it out now.” So I’m sad that I can’t do that in January when I have the funds :(

    I think I remember reading somewhere – maybe Boomer & Echo – that if you have a defined benefit pension that reduces your RRSP contribution limit for the year? I would look into that.

    That’s awesome that Bryan from Moneysense.ca interviewed you!!! Congrats!

    • @Leigh- Really? I didn’t know that’s how it works in the states. Yup, Boomer and Echo guest posted on my blog about defined benefit pensions. It says on the notice of assessment how much you can contribute after the pension adjustment. I usually max out that number (because it’s not that high).

  3. Congrats on the MoneySense interview, Clare! That’s awesome :)

    I made a modest RRSP contribution in December, but I don’t contribute throughout the year because my pension contributions are massive (11%).

    Thanks for the mention!

  4. Clare, a big congrats on the MoneySense interview, that’s great! I really like your approach of regular monthly contributions, makes much more sense than a lump sum payment. In fact if you do the lump-sum payment you are less likely to find the capital to invest.

    Right now my goal is to maximize my TFSA’s first, before the RRSP, becuase the TFSA really is tax-free investing!

    Cheers :)

    • @TDN- Yeah, that’s my goal too, except my index funds are through my RRSP and they are just so easy! Once I pay back my HBP I’m just going to go TFSA all the way first. Good luck with your TFSAs, I’m sure you’ll fill it up in no time.

  5. In the past (including this year), we have always waited until January or February to determine how much we were going to put into RRSPs for the tax year in order to maximize our refund. Now that our earnings are much more stable though, I think I will start doing monthly amounts into RRSP mutual funds for both my husband and myself in order to take advantage of some dollar cost averaging.

    • @Marianne- Great idea! :) I love the dollar cost averaging idea and once I get my bad habit of buying individual stocks out of the way, I hope to index everything and just relax.

  6. I love that post about the idea of quitting your job by financial samurai. It is so easy to confuse revenue with profits and end up being completely delusional when it comes to the idea of making money online.

  7. Great stuff with the MoneySense article Clare! Awesome!

    Because you asked, you’re nosy like that (LOL), I make monthly contributions to my RRSP, I optimize this account each year meaning I contribute enough to my RRSP to avoid paying any income tax, and get a small tax refund each year.

    I put more importance on my TFSA, which is maxed out with dividend-paying stocks for 2012.

    Thanks very much for the mention. Enjoy your sunny weekend on the West Coast!


    • @MOA- Thanks! Ahh you’re one of THOSE people. I seriously love getting my tax refund a year and I’m so silly for doing that, I know.

      Did you buy new dividend stocks for 2012 or did you just add into your positions?

      It’s Tuesday and it’s still Sunny so I’m happy!

  8. Max out your RRSP, put the return into your TFSA. If you have a pension adjustment, you can’t put nearly as much into the former but still max out the latter. #PrettyMuchAllYouNeedToKnow

    • @Financial God- That’s great to hear! I love entrepreneurship and I think it takes a lot of guts to invest in your passion (but it is great!).

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