Deadline for RRSP contribution is rapidly approaching
Posted Feb 24, 2016 11:21 am.
This article is more than 5 years old.
If you’re still trying to figure out what you’re going to do before Feb. 29, you may want to get some input from your friendly neighbourhood financial expert.
Michael Wood with BMO Nesbitt Burns told 660 NEWS that if you don’t have a lump sum saved already, borrowing is worth it.
“Most banks offer RRSP loans at prime, so three per cent,” Wood explained. “Which, typically, their payback period is 12-24 months, depending on the size of the loan. Then, what you can do to make the repayment easier is you can use a portion, or all of your refund that you get from the government and pay that back on the loan, so that will generate a 30 per cent paydown of the loan.”
While the RRSP is the best vehicle for savings at income tax time, Wood added that other ways to go could be a TFSA, which is a tax sheltered savings program, or an RESP, which provide for government matching programs.
