One of the best things about investing in an RRSP is that big tax refund.
But a tax refund is not a GIFT from the government. It’s your money being returned to you—a refund based on overpayment in taxes.
So put your hard-earned money to good use. If you want the most benefit from your RRSP investment, reinvest your RRSP refund. Use the refund to jump-start next year’s contribution.
Better still, stop loaning the government your money, interest-free!
Use an online calculator to determine your tax refund for next year, based on your planned RRSP contribution.
Then fill out Form T1213 and ask your employer to reduce the amount of tax taken off each paycheque. With the extra money from each paycheque, contribute to your RRSP.
You won’t get a big refund, but your money gets a chance to grow longer and you won’t overpay on taxes (and loan the government your money interest-free).