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Maximize Your RSP Contribution
The benefits of contributing to an
RSP
- Reduces your taxes owing
- Potentially increases your tax refund
- Allows tax deferred growth for retirement savings
Does it make sense to borrow to increase your
contribution?
Borrowing to make an RSP contribution
If you don’t have enough money to maximize your RSP contribution room, one option is to take out a loan towards your RSP. There are several benefits to borrowing money to contribute, such as lowering your taxes owing and generating a possible tax refund.
When to borrow for your RSP
When deciding whether to borrow to contribute to an RSP, consider how big of a tax reduction you will receive, and how quickly you can afford to repay the loan. Borrowing to make all or part of your RSP contribution can make sense when the return on your RSP outweighs the interest cost of borrowing, or if you’re eligible for a tax refund. Consider borrowing for your RSP if you want to increase your RSP contribution. Contributing is a sure way to reduce your taxable income today, while providing for your retirement.
More information about borrowing to maximize your RSP
contribution.
Things to consider:
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