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RRSP Line of Credit
An RRSP line of credit allows
you to contribute to your RRSP—and therefore to increase your contributions—despite
a temporary cash shortage.
In addition, by using your tax refund to pay
off part of your line of credit, you increase your RRSP contributions
while keeping the same monthly payments.
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Features and Advantages |
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You maximize your retirement savings
immediately. |
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You receive a higher tax refund.
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You benefit from your unused contributions.
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You reach your savings objectives more quickly.
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You increase your retirement income.
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How an RRSP Line of Credit Maximizes Your Retirement Capital |
The example below illustrates how you can
double your RRSP contribution and keep the same monthly payments. All
you need to do is use your tax refund to pay off part of your RRSP line
of credit.
1 |
Current rate applicable on a loan
of less than $5,000. Amortization period of 12 months.
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2 |
Current rate applicable (without the reduction of ½ of 1%)
on a loan of $5,000 or more. Amortization period of 12 months.
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3 |
On the basis of a marginal tax rate of 48% that can vary according
to your financial situation.
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4 |
On the basis of an annualized return of 7%.
*The interest rate is subject to change without notice.
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