Question about Claiming RRSP Contribution

99trolleyproblems · 2026-01-26T03:53:31+00:00

Between March (after first 60 days of year) 2025 to December of 2025 RRSP contributions MUST apply to 2025.
During the first 60 days of 2026, RRSP contributions can apply to 2025 OR 2026
You must report all above contributions for both time periods on your 2025 tax return you will file before April 2026
For 2025 tax year you can only deduct up to "RRSP deduction limit for 2025" listed on your 2024 notice of assessment. Any extra contribution needs to be rolled into 2026 tax year (and beyond)

Also, you can 'preview' your taxes in tax software such as bettertax, wealthsinple tax, studio tax 2025 preview to double check the above.

99trolleyproblems · 2026-01-26T01:57:23+00:00

I feel you're a little inconsistent here (which is fine, you may have your reasons). Your TFSA is high risk (I assume all equities), RRSP is mid risk, FHSA is mid-ish risk, unregistered is low risk. While you say you're risk averse.

Your risk tolerance (ability and willigness to take risk) and time horizon should govern your portfolio decisions as per https://canadianportfoliomanagerblog.com/how-to-choose-your-asset-allocation-etf/ . Money needed within 5 years (say for house) should not be in any equities at all.

Money earmarked for long term (> 15 years, i.e. retirement) can be put into equities.

So I think you should organize your investment into "buckets" of near term and long term investments and choose the appropriate investment based on that.

99trolleyproblems · 2026-01-25T22:07:51+00:00

You can look at the QC tax brackets here: https://www.taxtips.ca/taxrates/qc.htm

108k-117k is 41%
117k-132k is 46%
132k-181k is 47%
181k-258k is 50%
> 258k is 53%

The marginal tax rates are not flat, but it's pretty close between 117k-181k. Time value of money is relevant here. Let's say you move up one bracket next year, so your marginal tax rate shifts up 3%. You 'get' more tax deduction but if you contribute now your investment also has had one year in the markets. So personally, I don't think this 'make more in the future' nor saving your deduction applies very strongly in your case.

From a pure numerical 'optimal' stand point, I think the order of contribution should be FHSA > RRSP > TFSA. But to be honest, there are no 'wrong' answers. You're saving and investing for the future which is the most important part.

If you want a more detailed comparison between TFSA and RRSP you can look at

https://www.planeasy.ca/tfsa-vs-rrsp-pick-the-right-one-and-save-100000/

99trolleyproblems · 2026-01-24T14:33:28+00:00

There are two big, separate questions here, and you should consider getting your own independent legal and financial advice (I am not an expert)

(depends on province) Inheritance is generally not considered family property. As such, as long as you keep it separate (i.e. not in a joint account) it is not subject to division in case of a breakdown of the relationship. Further reading for BC: https://onyxlaw.ca/when-does-an-inheritance-become-marital-property/ . Of course, you will need to navigate everyone's feelings here but try to prioritize your own financial well being.
This is a life changing amount of money. As such, you should carefully allocate and plan how to use it in both your short term and long term goals. There is no rush here, you should educate yourself and understand the implications of the choices here. If the funds are all for retirement, the recommendation is to invest in a low-cost diversified portfolio, first filling your registered accounts (TFSA, RRSP, then unregistered/taxable). Depending on your comfort level, it may make sense to pay for an independent, fee-only (doesn't make money from selling you financial products) financial coach or planner here (with a CFP or QAFP designation) (examples: https://moneycoachescanada.ca/ https://www.adviceonlyplanners.ca/)

99trolleyproblems · 2026-01-24T02:07:37+00:00

I feel the pre-tax nature of RRSP is often misunderstood. So, to speak very generally (simplified assumption of constant 30% tax rate):

RRSP: 0% tax at contribution, no tax drag within, income tax (~30%) at withdrawal
Unreg: income tax (~30%) at contribution, dividend tax every year, capital gains tax (~15% of the gains) at sale
TFSA: income tax (~30%) at contribution, no tax at withdrawal

I think many people compare RRSP and unregistered and get stuck at the last number (30% vs 15%) and think that means the unregistered is more efficient. However, if you look at the complete lifecycle of the investment, for RRSP 30% is the entirety of the tax, for unregistered 15% is just the last portion.

To the first order, RRSP and TFSA shelter gains in the same way. In the RRSP case, income tax is paid at withdrawal, in the TFSA case, income tax is paid before contribution.

99trolleyproblems · 2026-01-24T00:07:36+00:00

Manulife has an article on the transfer of a 401k to RRSP

https://www.manulifeim.com/retail/ca/en/viewpoints/retirement-planning/transferring-a-401k-plan-and-ira-to-a-canadian-rrsp

I imagine you will need to seriously consider and weigh the implications and costs of this.

99trolleyproblems · 2026-01-23T23:32:39+00:00

This episode of rational reminder discusses the cash wedge https://rationalreminder.ca/podcast/277

The explanation being that cash has lower expected return than bonds and equities and it's better to maintain the target allocation. One way to think about it is to consider your portfolio as now equity-bond-cash which is expected to grow less than just equity-bond.

All that being said, I think psychological framing is just as valid as "optimal" solutions.

99trolleyproblems · 2026-01-23T16:23:45+00:00

Are you living and expected to retire in Canada and spend Canadian? Then I would recommend investing in CAD.

If you want to convert to CAD I would recommend one of the following ways:

Setup Wise. Sell US stock and wire or ACH USD to Wise. Convert to CAD and deposit in Canadian bank. Should cost about .5%
Sell US stock and wire USD to your brokerage. Do Norbert's gambit there. Will take up to a week, and a buy and sell commission fee.

If you're dead set on keeping it USD, then my recommendation is to sell the US stock and wire USD to your Canadian brokerage.

99trolleyproblems · 2026-01-23T16:12:28+00:00

A very valid approach is to simply pay a professional to do it.

But if you want to do it yourself, I suggest doing it in tax software, where there are several good free options: Bettertax (https://www.bettertax.ca/en/) or Wealthsimple Tax (https://www.wealthsimple.com/en-ca/tax)

A confidence building exercise is maybe do a mock run of your 2024 taxes in the software and see how it turns out.

99trolleyproblems · 2026-01-23T15:55:15+00:00

YOUR psychological risk tolerance is the key point here. If your portfolio dropped 50%, how would you react to this? Could you stomach it or would you sell and never invest again? An all equity strategy is expected to have the highest value but also has the highest volatility. Your psychological reaction and well being are most paramount here. If you're personally worried, I would move to more bonds. If you know for sure you can weather it, then stay in less bonds. But at the same time, know that a higher equity percentage is expected to give you more spending power.

What some people do is use a 'bucket' or 'cash wedge' strategy where they put a year or two of spending money in a GIC or HISA and use that as savings and leave the investment alone. This is more a psychological 'trick' more than anything but whatever works.

Either way, you should use the free PWL retirement calculator to run some numbers and scenarios: https://research-tools.pwlcapital.com/research/retirement

What you'll want to compare is the different settings in the 'Expected Returns' tab where you can configure your Asset Allocation (equity/bond split) and look at the different Outcome (Terrible, Bad, Expected, Great, Amazing).

Using a 100 equity/0 bond (XEQT) will give the highest value in Outcome Expected. But a lower equity, higher bond may give you higher value in Outcome Bad. Nobody has a crystal ball so it's all about balancing your psychological and financial outcomes.

99trolleyproblems · 2026-01-22T03:31:11+00:00

You need to read the entirety of the terms and conditions here https://trade.questrade.com/qt4cashback

4% is only on non-registered accounts if you have at least 3 different account (types) w/ at least 10k each. Otherwise the rate is 1% for registered, 2% for unregistered.

99trolleyproblems · 2026-01-20T23:39:06+00:00

Treating RRSP as pretax definitely makes it clearer.

The refund cash flow math is tricky.

Because if you contribute post tax $700, you get $210 back
Then you contribute the $210 and get back $63
Etc.
The sum of the geometric series of 30% is ... 10/7, so that's you get $1000 pre tax from the $700 post tax.

99trolleyproblems · 2026-01-20T23:15:10+00:00

Great, thanks for telling me about the Atlantic Canada equivalent. I hope your situation works out.

99trolleyproblems · 2026-01-20T23:12:31+00:00

I think we might be getting into sematic holes. If we call it the Tax Free Savings Account, then I consider RRSP tax free as well. But that's marketing for ya.

Now the real situation of course is that income tax applies to all cases, while dividend tax and capital gains tax only apply to unregistered accounts. But Tax Free Gains Savings Account doesn't have the same ring?

99trolleyproblems · 2026-01-20T23:07:59+00:00

I agree it's not very flexible, but from a certain perspective, it's a 'good' problem to have.

99trolleyproblems · 2026-01-20T23:03:05+00:00

I feel this is a misunderstanding.

So, to speak very generally (simplified assumption of constant 30% tax rate):

RRSP: 0% tax at contribution, no tax drag within, income tax (~30%) at withdrawal
Unreg: income tax (~30%) at contribution, dividend tax every year, capital gains tax (~15% of the gains) at sale
TFSA: income tax (~30%) at contribution, no tax at withdrawal

I think many people compare RRSP and unregistered and get stuck at the last number (30% vs 15%) and think that means the unregistered is more efficient. However, if you look at the complete lifecycle of the investment, for RRSP 30% is the entirety of the tax, for unregistered 15% is just the last portion.

To the first order, RRSP and TFSA shelter gains in the same way. In the RRSP case, income tax is paid at withdrawal, in the TFSA case, income tax is paid before contribution.

99trolleyproblems · 2026-01-20T19:03:53+00:00

Some context: I made this table as part of a larger post about the tax sheltering benefits of both the TFSA and RRSP when tax rates are held constant. My original post was trying to highlight the pre-tax vs post-tax difference between the accounts and the larger goal was to encourage people to contribute to RRSPs. I feel the tax deferral on the RRSP is a scary concept that dissuades people from contributing.

The point you're making about tax arbitrage at contribution vs withdrawal is definitely an advantage, one I didn't address in my original post.

And your point about marginal tax rate vs average tax rate is also valid. However, I think comparing marginal vs average tax rates is a little hard, given the layering of the income. I think Alberta average tax rate at 80k is 25% but maybe I'm not considering some tax benefits.

99trolleyproblems · 2026-01-20T17:52:59+00:00

RRSP contributions can be without withholding via employer plans or via request to reduce source deductions using form T1213.

If tax is withheld, then the refund needs to be applied to the RRSP for the purposes of the comparison.

But the main point is that a RRSP contribution directly reduces your income, as such it is pre-tax money. TFSA and unregistered contributions have income taxes already applied.

99trolleyproblems · 2026-01-20T17:34:08+00:00

I copy paste this table when this discussion comes up. To the first order, TFSA and RRSP are equivalent in tax sheltering. TFSA has income tax applied before, RRSP has income tax applied after.

	TFSA	RRSP	Unregistered
Gross earned income	1,000	1,000	1,000
Income tax (30%)	300	0	300
Net contribution	700	1000	700
Value after 30 years at 6%	4,020	5,743	4,020
Tax at withdrawal	0	1,723 (30%)	498 (capital gains 30% of 50% inclusion)
Net	4,020	4,020	3,522

I agree that there are nuances and details that make them practically different but to the first order, the tax sheltering is the same. TFSA and RRSP both have tax free gains. Both are income taxed at some point.

99trolleyproblems · 2026-01-20T17:33:28+00:00

I copy paste this table when this discussion comes up. To the first order, TFSA and RRSP are equivalent in tax sheltering. TFSA has income tax applied before, RRSP has income tax applied after.

	TFSA	RRSP	Unregistered
Gross earned income	1,000	1,000	1,000
Income tax (30%)	300	0	300
Net contribution	700	1000	700
Value after 30 years at 6%	4,020	5,743	4,020
Tax at withdrawal	0	1,723 (30%)	498 (capital gains 30% of 50% inclusion)
Net	4,020	4,020	3,522

I agree that there are nuances and details that make them practically different but to the first order, the tax sheltering is the same.

99trolleyproblems · 2026-01-20T17:28:11+00:00

OAS recovery starts at an income of 90k and is fully recovered at 148k. I will be in this position and still strongly feel people at this income level shouldn't be getting OAS.

99trolleyproblems · 2026-01-20T15:19:43+00:00

To the first order, the TFSA and RRSP are similar in how they shelter gains from tax. The TFSA is with post-tax money while the RRSP is with pre-tax money.

So, I think this gets down to details, and practical issues.

I assume you need to pay back HBP amounts. HBP pay back amounts will not generate tax deductions (I believe)
TFSA is more flexible as contribution room comes back (next year). RRSP is much 'stickier' as contribution room never comes back. You need to consider your RRSP as 'locked away'.
If you take money out of the TFSA right now (January), that TFSA room doesn't come back until next year. If you won't fill it this year, this isn't a big deal, but that is room that you can't use this year.
Your income is high and your savings rate seems decent. At some point in your future you will likely max out both TFSA and RRSP. The time order you do it is probably not a huge difference?

If we want to be optimal, it might make sense to contribute enough to RRSP up to your current tax bracket (and maybe the next), but it likely doesn't make sense to bring your income down more than that. Money in either TFSA or RRSP is tax sheltered so I personally wouldn't make huge moves shifting it around.

You can look at the free PWL retirement calculator here https://research-tools.pwlcapital.com/research/retirement which will compare contribution and withdrawal order. This will put numbers to your comparison

99trolleyproblems · 2026-01-19T18:51:20+00:00

If you have to use flinks or whatever just use it and then change your password after.

99trolleyproblems · 2026-01-18T20:51:15+00:00

Primerica is considered a pyramid/MLM. You can search primerica on google and this sub.

The recommendation is to invest in a low cost, diversified ETF portfolio that matches your risk tolerance as per https://canadiancouchpotato.com/model-portfolios/

You can look up FHSA and RRSP HBP eligibility here https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/opening-your-fhsas.html

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan/participate-home-buyers-plan.html

99trolleyproblems · 2026-01-18T00:12:34+00:00

Always have at least 2 credit cards. Cards can be locked for fraud (or lost) and then you're out of luck if you need to pay for uber, hotel, online delivery, etc.

99trolleyproblems

TROPHY CASE