BMO Nesbitt Burns
First Canadian Place
100 King St. W, 38th Floor
|It’s important to start the year out right and maximize the value of your registered/tax-sheltered savings accounts; namely, your Registered Retirement Savings Plan (RRSP), Tax-Free Savings Account (TFSA) and Registered Education Savings Plan (RESP), by making your annual contributions in a timely manner. These plans represent highly effective ways for you to save for retirement, your children’s (or grandchildren's) education and other long-term goals, while providing significant tax-saving opportunities.|
RRSP contribution details•The deadline for making your 2019 RRSP contribution is March 2, 2020.
• Your 2019 RRSP contribution limit is based on any unused contribution room carried forward from 2018, plus your 2019 contribution amount (the lesser of $26,500 or 18% of your 2019 earned income less any applicable pension adjustments).
• If you’ve already made your 2019 RRSP contribution, consider making your 2020 RRSP contribution now to benefit from the tax-deferred growth of an RRSP. The maximum RRSP contribution limit for 2020 is $27,230 less any pension adjustments.
TFSA contribution details• The annual TFSA contribution limit for 2019 is $6,000.
• Unused contribution room – dating back to 2009 when TFSAs were first introduced – carries forward and can be used in any future year. For individuals who were eligible (i.e., age 18 in 2009 and a Canadian resident) but have never contributed to a TFSA, your 2019 TFSA contribution limit will be $69,500.
• You can gift funds to your spouse/common law partner (spouse/partner) or adult child to allow them to contribute to their own TFSA (subject to their personal TFSA contribution limit). Income earned within a spouse’s/partner’s or adult child`s TFSA will not be attributed back to you.
RESP contribution details• You may contribute a lifetime maximum of $50,000 per beneficiary.
• There is no minimum annual contribution limit that you must make. The number of years over which contributions can be made to an RESP is 31 years.
• The federal government’s Canada Education Savings Grant (CESG) helps ensure students have enough money to fund their higher education. The grant pays 20 per cent of annual contributions per beneficiary to an RESP, up to a maximum of $500 per beneficiary. The maximum lifetime CESG is $7,200 per beneficiary.