3 things you need to know for RRSP season

(NC) A Registered Retirement Savings Plan (RRSP) is one of today’s most commonly used savings vehicles, in large part because contributions are tax-deductible and the product is designed specifically for retirement.

You’ll have until March 2, 2020 to contribute to your RRSP and claim the amount on your 2019 tax return. Any contributions made after this deadline will count towards the 2020 tax year.

RRSP season is a great opportunity to review your finances and decide if you want to make any adjustments or set up automatic contributions for the upcoming year.

With the 2019 deadline fast approaching, here are some tips from TD:

New year, new rules: Every year, there are new contribution limits, deadlines and other changes. For example, in 2020, first-time homebuyers can now withdraw up to $35,000 (or $70,000 per couple) from an RRSP to finance a down payment on a home, subject to eligibility and conditions. This withdrawal is tax-free but must be repaid into the RRSP within 15 years. Before taking out any money, speak to an advisor or financial planner to see if this program is appropriate for you.

Contribute carefully: Understanding how much to contribute can be confusing. In 2019, each Canadian has a personal RRSP contribution limit of up to 18 per cent of their earned income, up to a maximum of $26,500 plus any unused contribution room from past years. However, those belonging and contributing to an employer’s pension plan may have reduced limits for their RRSP. It’s important to keep track of all your contributions to ensure you stay within your annual limit.

Withdraw wisely: RRSPs are typically set up to support long-term savings and retirement. Since RRSPs are designed for long-term saving, withdrawals are subject to tax. However, under the Home Buyers’ Plan, first-time homebuyers can withdraw up to $35,000 (or $70,000 for a couple) to finance a down payment, subject to eligibility and conditions. The withdrawal is tax-free but must be paid back into your RRSP within 15 years. Speak with an advisor or financial planner before withdrawing any funds to ensure you understand the implications.

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Set your home up for a cozy winter

Add layers of lighting. Our winters can be long and cold, so take steps to make sure your refuge is toasty warm and inviting. Swap out cool, white lightbulbs for warm ones and place plenty of light fixtures at various heights throughout your home. Think reading lamps, wall sconces and pendant lights. If you have a fireplace, make sure it’s clean and safe to use for natural lighting and warmth. You can also pepper your home with candles in comforting seasonal scents like fresh pine or cinnamon.

Create cozy nooks. Whether it’s in your bedroom, living room or study, set up spaces that make you want to curl up for a relaxing evening. Try making a little reading nook in your bay window where you can dive into a good read while pausing to watch the snow fall. If you love board games or puzzles, set up a dedicated table on the side of your living or family room, and you can leave them out so you can return whenever you like without worrying about tidying up.

Warm up with textiles. What’s better at this time of year than snuggling up with a fluffy pillow and blanket? Down isn’t just for the bed anymore, and there are lots of stylish (and Canadian) options that are a great addition to warm up any room in your household. For the most warmth and best insulation, choose high-quality down products that keep warmth in and cold out. Look for the Downmark label, which certifies a product is Canadian made and ethically sourced, an important feature for today’s savvy consumer.

Find more information at downmark.org.

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