Author Topic: Should I transfer my work bonus $$ directly to my company RRSP?  (Read 1356 times)

lifejoy

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I have an option to do this, and I think probably I should so as to avoid paying tax on my bonus (~$2000). Yes? No? Why?

I'm so new to RRSPs.

going2ER

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Re: Should I transfer my work bonus $$ directly to my company RRSP?
« Reply #1 on: April 01, 2016, 10:54:54 AM »
For me RRSP's are worth investing in to lower my tax rate, I've never had the option of directly putting money into an RRSP though. Depending on which level of tax you are paying, it may or may not be worth it. If you are already in the lowest tax bracket then it may not be worth it. Higher tax brackets, I would use the RRSP.

okits

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Re: Should I transfer my work bonus $$ directly to my company RRSP?
« Reply #2 on: April 01, 2016, 12:05:58 PM »
Congratulations on the bonus!

Do you anticipate being in a lower tax bracket in a future year (so the eventual tax paid on the bonus will be less than what you'll pay today?) Or is it likely you'll have some higher-earning years ahead, where you'll be in a higher bracket than now (so it's worth saving the RRSP deduction for those tax years?  You can still contribute the money now, just delay taking the deduction.)

Another consideration, if children are on the horizon, is the impact of the Canada Child Benefit (if your household net income is near or over $200k it may be worth having the unused RRSP deductions at that time to reduce it and receive more benefit, or worth it to avoid deregistering RRSP assets during those years to avoid losing some of the benefit.)

TravelJunkyQC

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Re: Should I transfer my work bonus $$ directly to my company RRSP?
« Reply #3 on: April 01, 2016, 02:10:42 PM »
I would reiterate what the others have said about checking which tax bracket you are in to see if it is worth it. If you're in a lower tax bracket, think about filling up your TFSA first (or if it's full up, you go girl! And then go for it with the RRSP I say!).

lifejoy

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Re: Should I transfer my work bonus $$ directly to my company RRSP?
« Reply #4 on: April 01, 2016, 02:22:25 PM »
So I'm in the lowest tax bracket I will ever be in EXCEPT if I stay home to raise kids one day, or if I retire. :)

My TFSA is not full. So... put it in my TFSA, after taxes?