{"id":1295,"date":"2015-02-10T00:14:51","date_gmt":"2015-02-10T05:14:51","guid":{"rendered":"http:\/\/www.holypotato.net\/?p=1295"},"modified":"2015-02-10T00:30:14","modified_gmt":"2015-02-10T05:30:14","slug":"value-of-simple-rrsp-series-part-1-the-deadline","status":"publish","type":"post","link":"https:\/\/www.holypotato.net\/?p=1295","title":{"rendered":"Value of Simple RRSP Series Part 1: the Deadline"},"content":{"rendered":"

“I love deadlines. I love the whooshing noise they make as they fly by.”<\/p><\/blockquote>\n

February is usually better known as “RRSP season” as the deadline approaches — this year that deadline is March 2, 2015.<\/p>\n

But a deadline for what<\/em>, exactly?<\/p>\n

The deadline for RRSP contributions to count against the previous years’ taxes — due to a quirk in the rules, contributions made the first 60(ish) days of the the year can count to the current year or the previous one — so this is a last chance to make a contribution and reduce your 2014 taxes owing. <\/p>\n

Yes, there is time value to money, and you don’t want to go a lifetime without contributing to your RRSP, but this is the least <\/em>important deadline there is. If you don’t log in to your online banking to make a contribution until March 3rd this year, it just means you have to wait a year and two months for your refund instead of just two months. When you’re 75 and spending that money you’ll care whether it’s there at all <\/em>far more than whether the tax deduction was taken a year later. Plus for many people, the TFSA is a better choice to prioritize anyway, so this RRSP and refund stuff is just noise. Oh, and implicit there is another fact about the deadline: you can contribute at any point during the year, not just during this special “RRSP season.” <\/p>\n

But no, you will not lose your contribution room<\/em> — you carry it forward and accumulate it until you’re ready for it. The consequences of missing the deadline are very minor, so if you’ve procrastinated this long on putting together a financial plan and starting to invest, another few weeks or months is not going to kill you — though please do commit to getting it done sometime this year.<\/p>\n

Indeed, you don’t<\/em> have to contribute in a lump sum right at the end and can ignore the deadline by starting a regular contribution plan now, and even fill out a form get your employer to stop taking the tax off at the source so you get the money working for you right away (and then you don’t get a refund in the spring — which also takes away the temptation to spend it). So despite the media and advertising blitz that happens every February, RRSP \u00e2\u20ac\u0153season\u00e2\u20ac\u009d isn’t really a big deal. <\/p>\n

So, let’s not stress out over this deadline: if you miss it, the consequences are pretty minor. The last few weeks of February are the worst time to try to go to a bank to open an account or meet with your planner. But if you do <\/em>want to get your contribution in before the deadline you can do so and let it sit in cash (or a money market fund — the equivalent for a mutual funds account), as Sandi points out in this post<\/a>, and make a plan at your leisure, and invest it when you’re more prepared (though seriously, it only takes one weekend to burn through the Value of Simple<\/a>).<\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

“I love deadlines. I love the whooshing noise they make as they fly by.” February is usually better known as “RRSP season” as the deadline approaches — this year that deadline is March 2, 2015. But a deadline for what, exactly? The deadline for RRSP contributions to count against the previous years’ taxes — due […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22,16],"tags":[],"_links":{"self":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/posts\/1295"}],"collection":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1295"}],"version-history":[{"count":0,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/posts\/1295\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1295"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1295"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1295"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}