My 2011 RRSP Contributions

Confession: 2011 was my worst year for contributing to the RRSP I opened in 2007. I’m not sure any of you will be surprised by that, considering my current financial situation, but it hurts to admit nonetheless.

In the past, I used to contribute $100 monthly. Even that didn’t always feel like enough but it helped me put away $1,200 per year (which was really my only savings). When I moved to Toronto last February, I had no idea if I was going to find a job or not, but I still wanted to contribute so I lowered my contributions to $50 monthly.

You all know how that story goes. I did not find a job in Toronto and, instead, came home 3 months later completely maxed out. I continued making my puny $50 contributions for the rest of 2011, while living at home and paying off huge chunks of debt. I wanted to contribute more but getting out of debt was my top priority.

In the end, $50 x 12 months = $600. That’s all I contributed to my RRSPs in the 2011 tax season. But the worst part is that I can only write-off $450 of that.Why? Because I paid for the rest of my education using the Lifelong Learning Program (LLP).

The LLP lets you pull from your RRSPs tax-free, to pay for post-secondary tuition. This is the reason I’m going to graduate with $0 in student debt. But, when you use the LLP, you cannot claim any contributions ┬ámade 90 days before the date you pulled your money out. For me, that’s $150 I can’t write-off this year.

So, my 2011 contribution was only $450. That’s half a month’s rent!

2012 is not going to be a repeat of 2011. I’ve already changed my contributions from $50 monthly to $50 bi-weekly and, when my credit card is paid off, I plan on making that $75 or $100 bi-weekly before the year is over. And can you imagine how much I’ll be able to contribute when my other loans are paid off!? Ok, I’ll stop daydreaming…

Did you contribute to RRSPs this year? If not, you still have 10 days to do so!

11 Comments

  1. I also daydream about what big strides I could make if I were debt-free, maybe even max out my RRSP!! :)

  2. I contribute through an employer sponsored (although not employer matched) RRSP at a rate of 5% of my pre-tax income. I also have a work sponsored pension plan, to which I contribute about 8% and my employer contributes I think around 10%? I keep thinking I could add more to my RRSP before my cheque hits my bank account but it would take away from my more short term savings goals. It’s really a balancing act!

    $600 is still going to be a ton over your working career, and its $600 more in your retirement fund! Any amount is a good amount, especially when compounded over 40ish years.

    • I used to do $1,200/year and I’d like to do *at least* that for the rest of my working career. But I, like you, also have a pension plan, that would be pretty decent if I stayed with my current employer for my entire career. So that’ll certainly help.

  3. I haven’t totalled everything up yet. I put 3.5% of my salary in that I can’t write off in while I was at my previous employer in 2011, and 7.5% of my salary in that I can’t write off while I’ve been with my current employer in 2011. I’ve also put almost $1000 into another account that I can’t write off because it’s all going to my home buyer’s plan repayments. I’m looking forward to putting some in that I can write off in 2012.

  4. You did great – I only contribute $25 /month to my RRSP right now – my blog income isn’t steady enough to be able commit more to it, and I want to deflect the rest of my money to paying off my car loan. I have no idea how much my RRSP makes in interest – the ING Mutual Fund Streetwise one is great but super confusing.

  5. Contributing to my RRSP is on my to-do list for this week. Thankfully, my employer has an RRSP matching program, which is excellent for absent minded people like me. Gotta love saving with no effort required. I think I will do a lump sum contribution, but it won’t be as much as other years because I’d like to do some renovations to my house this spring/summer.

  6. I’ve been regularly contributing to my RRSPs monthly, so there’s not much left for me to do in the next 10 days except wait for my forms to come in! :)

    In 2012, I want to shift most of my investments outside of my Manulife portfolio and into the TD e-series portfolio since the fees are pretty low there (about half of what I am paying now at Manulife!).

  7. As I don’t live in Canada I don’t have an RRSP account. I do contribute to a retirement savings plan of 4% of my salary that is matched by my employer. It is amazing how it adds up over a few years.

    Also, I wanted to say the picture of the glass piggy bank is gorgeous.

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