RRSP Basics: Questions Answered

Marci • January 24, 2017

Guest post by Randy Cass,

Welcome to RRSP season, otherwise known as the one time of year you’ll willingly read an article with RRSP in the title. It’s not a traditionally exciting topic, we get it, but it’s an important one. A little planning now will pay off big time later. We’re going to walk you through some of the most common questions we hear. Let’s get into it!

What’s so special about the RRSP?

A Registered Retirement Savings Plan is an account (think of it as a basket) that holds savings and investments. The magic of the RRSP is twofold: contributions are made with pre-tax income, meaning you’ll get a tax refund, and investments grow inside your RRSP basket tax free. That’s right, the tax man isn’t allowed to stick his hands in there. Compound interest  is left to do what it does best, grow your nest egg!

Just remember deferring tax doesn’t mean you’ll avoid paying it altogether. You’ll have to pay taxes when you withdraw money during retirement just as you would on any other income. The idea is you should be in a lower tax bracket when you retire and take out money, therefore you’ll pay less tax overall. Making sense so far?

What kinds of things can I put in there?

You can fill your RRSP basket with investments like stocks, bonds, GICs, mutual funds, ETFs, and money market funds. A common misconception is that a RRSP is an investment you purchase. It’s an account you open (think basket) and fill with investments you buy.

How much can I contribute this year?

You can contribute up to 18% of your income to a maximum of $25,370 for 2016. Your contribution room accumulates over time so if you haven’t maxed out your contributions in the past (many people haven’t!) you’ll have even more room available. Check the notice of assessment you received with last years tax return, or give CRA a call, to find out exactly how much contribution room you have. Your accountant will be able to tell you as well.

What’s this contribution deadline I’ve seen advertised?

The stretch between New Years and the contribution deadline has been dubbed “RRSP Season” which you’ve likely seen advertised at local banks. March 1st 2017 is the latest you can contribute to your RRSP and have the deduction count for the 2016 tax year.

This doesn’t mean any contributions made during January and February 2017 have to be claimed against the 2016 tax year. If you want to make a contribution now and save part or all of the deduction for 2017 (perhaps you’re expecting your income to be higher) you can do that.

How often can or should I contribute to my RRSP?

All this RRSP season hype might give you the impression you can only contribute once a year, but that’s not true! You can set up regular automatic contributions  (monthly, quarterly, etc) and avoid the RRSP season rush altogether.

An unexpected expense came up, can I withdraw money from my RRSP to cover it?

You can, but it might not be your best option. Depending on how much you withdraw you’ll be charged a 10-30% penalty  and you’ll have to pay income tax on that money. Keep in mind you won’t be able to re-contribute the amount you withdrew at a later date. That contribution room is lost.

Two ways you can withdraw money without penalty is under the Home Buyers Plan  and the Lifelong Learning Plan. The former is eligible to first time home buyers while the latter is available if you enrol in a qualified education program.

What happens to my RRSP when I retire?

Regardless of when you decide to retire, you’ll have to close your RRSP by December 31t in the year you turn 71. You can withdraw all your money (and be hit with a hefty tax bill), purchase an annuity, or transfer it into a Registered Retirement Income Fund (RRIF). You don’t have to convert your RRSP to a RIFF when you turn 65 or at the same time you retire. You can convert it at anytime before you turn 71.

What should I consider when opening or moving my RRSP?

You’ll need to look at the fees you’re paying —these include management expense ratios (MERs) for any mutual funds or ETFs, trading commissions, and annual administration fees. You want to keep these fees low so your money can grow as much as possible. If you’re working with a financial advisor check your statements to verify how much you’re paying. If you’re looking for lower fee investment options consider going the self directed  route or opening account with one of Canada’s digital wealth advisors.

We think Nest Wealth  is pretty awesome, but you know, we’re biased.

That’s it for now. You made it! You’re well on your way to mastering your RRSP and reaching those retirement goals. Knowledge is power, my friends.

 

This is a guest post from Randy Cass , CEO of Nest Wealth, a Canadian asset management company, it was originally published  on their website on January 19th, 2017.

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Make the Most of Summer: Outdoor Project Ideas for Every Space

By Marci Deane • July 10, 2025
Summer in Canada is short—but sweet. With warm weather and long evenings, it’s the perfect time to get outside and enjoy your outdoor space, no matter how big (or small) it is. Whether you have a tiny patio or a sprawling backyard, a few creative upgrades can go a long way toward turning your space into your personal summer oasis. Below are ideas for every type of outdoor space, from cozy balconies to large backyards! For Patio-Only Spaces Limited to a balcony or concrete patio? No problem! Small spaces can still offer big enjoyment. 1. Upgrade the Flooring Add interlocking tiles to give your concrete floor a more polished look—wood grain, grass panels, or composite styles are all popular, easy-to-install options. 2. Create an Outdoor Movie Zone Hang a pull-down screen or grab a portable stand, pair it with a mini projector, and voilà—your very own outdoor movie theatre under the stars! 3. Start an Herb Garden Railing planters are perfect for growing basil, mint, parsley, and more. Fresh herbs at your fingertips—and they smell amazing too! 4. Add Some Twinkle Wrap fairy lights around your railing or overhead beams to bring cozy vibes and nighttime charm. 5. Grill Like a Pro Maximize your BBQ season with a compact baby-que. Weber’s Q Series is a great option for small spaces without compromising grilling power. For Small Yards A little yard can still pack a lot of personality. Here are ways to make the most of every square foot: 1. Game Time! Add a mini putting green or an axe-throwing target (just be safe!) for quick bursts of backyard fun that don’t take up much space. 2. Warm Up Your Nights Add a heating lamp or portable fire bowl to keep your evenings cozy well into the fall. 3. Grow Your Own Produce Build or buy a raised garden box to grow tomatoes, cucumbers, lettuce, or other easy vegetables. Gardening is relaxing—and delicious! 4. DIY Bird Bath Make a pedestal bird bath using an old vase, a platter, and strong glue. You likely have everything you need already at home—and the local birds will thank you! For Big Yards If space isn’t an issue, the sky’s the limit! Here are some larger-scale projects to take your yard to the next level: 1. Build a Catio Yep, it’s a “cat patio”! Give your feline friends a safe way to enjoy the outdoors with a screened-in enclosure attached to your home. 2. Create a Permanent Fire Pit Use stones and a fire ring to build a beautiful, safe fire pit. You can even add airflow cutouts to reduce smoke—perfect for those marshmallow roasts! 3. Tile a Dining Area Install paving stones or tiles to define an outdoor dining space. Add a table, some string lights, and enjoy al fresco meals all summer long. Need More Inspiration? If none of these projects quite fit your vision, check out Home Depot’s DIY backyard ideas—complete with step-by-step instructions and material lists to help you bring your outdoor dreams to life. Soak It Up While It Lasts No matter the size of your space, there’s always something you can do to enhance your outdoor experience. So get out there, get creative, and make the most of these sunny summer days. See you back here in August—with more tips, tricks, and homeowner insights!

Deposit Lending And Bridge Financing

By Marci Deane • July 9, 2025
Let’s say you have a home that you’ve outgrown; it’s time to make a move to something better suited to your needs and lifestyle. You have no desire to keep two properties, so selling your existing home and moving into something new (to you) is the best idea. Ideally, when planning out how that looks, most people want to take possession of the new house before moving out of the old one. Not only does this make moving your stuff more manageable, but it also allows you to make the new home a little more “you” by painting or completing some minor renovations before moving in. But what if you need the money from the sale of your existing home to come up with the downpayment for your next home? This situation is where bridge financing comes in. Bridge financing allows you to bridge the financial gap between the firm sale of your current home and the purchase of your new home. Bridge financing allows you to access some of the equity in your existing property and use it for the downpayment on the property you are buying. So now let’s also say that it’s a very competitive housing market where you’re looking to buy. Chances are you’ll want to make the best offer you can and include a significant deposit. If you don’t have immediate access to the cash in your bank account, but you do have equity in your home, a deposit loan allows you to make a very strong offer when negotiating the terms of purchasing your new home. Now, to secure bridge financing and/or a deposit loan, you must have a firm sale on your existing home. If you don’t have a firm sale on your home, you won’t get the bridge financing or deposit loan because there is no concrete way for a lender to calculate how much equity you have available. A firm sale is the key to securing bridge financing and a deposit loan. So if you’d like to know more about bridge financing, deposit loans, or anything else mortgage-related, please connect anytime! It would be a pleasure to work with you.

How To Get A Mortgage After Bankruptcy

By Marci Deane • July 2, 2025
Sometimes life throws you a financial curveball. Bankruptcy and consumer proposals happen. It doesn’t mean your life is over, and it doesn’t mean you won’t ever qualify for a mortgage again. The key to financial success here is getting things under control as quickly as possible. You must demonstrate to the potential lenders that what happened in the past won’t happen again in the future. So if you’re thinking about getting a mortgage post-bankruptcy, lenders will want answers to the following questions: How long have you been discharged? Securing a mortgage will be dependent on how long it has been since you were discharged from your bankruptcy or consumer proposal. Most lenders consider the discharge date on both to be your new ground zero. And while there is no legally defined waiting period for when you can apply for a new mortgage post-bankruptcy, what lenders will assess is how you’re managing your finances after your financial troubles. Have you established new credit? You can show lenders that they can trust you after bankruptcy by establishing new credit and managing that credit flawlessly. So as soon as you’ve been discharged, it’s a good idea to get a secured credit card and start rebuilding your credit score. To be considered completely established, you’ll want to have two years of credit history on two trade lines with a credit limit of $2500 on each trade line. You’ll also want to make sure that you have no late or missed payments. How much do you have available for a downpayment? The more money you have to put towards purchasing a property, or the more equity you have in your property in the case of a refinance, the better your chances of getting a mortgage. The more money you bring to the table, the more comfortable a lender will feel about the risk they take of losing their investment should you run into future financial difficulty. What is your total debt service ratio? Another consideration lenders will look at is how much money you make compared to the cost of making your mortgage payments. So it probably goes without saying that the more money you make compared to the amount you want to borrow, the better. Conventional or insured financing. If you’re looking to get the best mortgage products available, here are some of the things a lender will want to see: You’ve been discharged for at least two years plus a day. You’ve established your credit (as listed above). You have at least 5% down for the first $500k of the purchase and 10% down for anything over $500k. If you don’t have a 20% downpayment, you will be required to secure mortgage insurance through CMHC, Sagen (formerly Genworth), or Canada Guaranty. The cost to service the property and all your debts don’t exceed 44% of your gross income. Alternative lending As independent mortgage professionals, our job is to provide solutions and strategies for our clients. As such, in addition to dealing with many traditional lending institutions, we also have access to lenders who specialize in working with clients whose financial situation isn't all that straightforward. These private lenders offer alternative lending solutions that consider the overall strength of your mortgage application. While you won’t qualify for the best rates and terms on the market by going with an alternative lender, if you’re looking for options, you might find that alternative lending is a very reasonable solution for you. Alternative lending isn’t for everyone, but it’s an excellent solution for some, especially if you’ve gone through a bankruptcy or consumer proposal and need a mortgage before fully establishing your credit. Get in touch anytime. So whether you’re looking for a plan to help you qualify for a mortgage with the most favourable terms or if you need something more immediate. Please connect anytime. It would be a pleasure to outline your options and work on a plan to get you a mortgage.