Are interest, dividends and capital gains taxed in an RRSP or in a registered pension plan?

None of the investment income is taxable as long as the funds remain in the RRSP or the registered pension plan. However, each dollar that is withdrawn will be taxed as current income.

During a given year, until when can I contribute to my RRSP in order to obtain all the related tax benefits?

RRSP contributions for a given tax year can be made starting January 1 and continuing until 60 days after the end of the year. However, when the deadline falls on a Saturday or Sunday, contributions can be made until the following business day.

What is the annual RRSP contribution limit?

The annual RRSP contribution limit is equal to 18% of earned income, up to a maximum that is set annually. However, an individual who participates in his employer's pension fund will have the maximum amount reduced by the “pension adjustment” amount determined by the Canada Revenue Agency and recorded on his T4 slip.

What happens if I contribute more than the permitted maximum to my RRSP?

If you are over 18 years old, you can overcontribute $2,000 without incurring any penalty. It is important to note, however, that this limit is cumulative and not annual. If you exceed $2,000, the excess amount will be subject to a penalty of 1% per month. Persons under 18 years of age are penalized for any overcontribution. It should be noted that only the amounts that do not exceed your maximum allowable contribution are deductible from your income. Therefore, the $2,000 overcontribution cannot be deducted from your income as long as it is an overcontribution. Nonetheless, it grows tax-free.

Do I have to start withdrawing from my RRSP at age 65?

You are not required to make RRSP withdrawals starting at age 65. However, you are required to start doing so as of December 31 of the year in which you turn 71.

Are the shares of labour-sponsored funds (Fondaction and Solidarity Fund) as easily traded as the shares of large corporations listed on a stock exchange?

No. As stated in their prospectus, an investment in these funds must be considered to be an investment for retirement purposes. Indeed, the shares are redeemable upon request, but only as of the age of 65, or if you are 55 to 64 years of age and are retired or in early retirement. The shares may also be redeemed in exceptional circumstances: starting up a business, employment insurance benefits terminated, terminal illness, etc. It is advisable to read the prospectus issued by these institutions before making an investment. This link will open in a new window This link will open in a new window

I am 72 years old and my husband is 67. Can I contribute to his RRSP?

Yes. Even though you may no longer contribute to your RRSP because of your age (over 71), you can contribute to your husband's plan up to the amount indicated on the notice of assessment issued by the Canada Revenue Agency This link will open in a new window.