The procrastinator’s guide to the last-minute RRSP

The deadline is hours away and you haven’t made your contribution yet. Here’s what to do

When it comes to last minute RRSP planning, nothing surprises Michael Berton anymore. The Vancouver-based CFP has seen people dump cash in their accounts at the last second or invest in something unusual because they were pressed for time. He’s even seen people with 11 RRSPs, all at different financial institutions. “They literally opened an account on the last day,” he says.

While contributing at the last minute is frowned upon, there will always be people who procrastinate. The problem with waiting, though, is that people generally do dumb things or forget something crucial. So, if you haven’t made your contribution yet then consider these last minute tax tips to avoid any big mistakes.

This post is part of the MoneySense RRSP Guide 2015. Get everything you need to know at

1. Figure out if you need an RRSP

A lot of people panic at the last minute and open an RRSP because they think that’s what they should do. But for Canadians making less than about $40,000, investing in a tax-free savings account may make more sense.

RRSPs work best for people in higher tax brackets who can take advantage of the deduction now and, ideally, pay less tax when they withdraw. “Before doing anything, make sure it is tax effective to make the contribution,” says Armando Minicucci, a tax expert with Toronto’s Grant Thornton LLP.

It may also make more sense to pay off a high interest rate credit card balances before worrying about the RRSP deadline. In other words, think before you contribute.

2. Invest in a GIC

It’s easy to get caught up in the moment of last minute investing and choose whatever fund your financial institution puts in front of you. But don’t make a hasty decision that can potentially affect your long-term gains.

To avoid this potential trap, Berton says it may make sense to buy a 30-day GIC for your RRSP. This way, your money is working for you while you figure out how you want to invest it. When those 30 days are up, you can put your contribution into an investment that makes sense.

3. Consider an RRSP loan

If you don’t have as much money as you want to contribute by the deadline then you may want to consider an RRSP loan. Doing this gives you some extra cash and you can pay off the debt, or at least most of it, with your tax refund. But, if you want to go this route, you’ll need to act fast. It can take at least 24 hours for a loan to be approved.

4. Don’t forget your spouse

In the frenzy surrounding RRSP deadline, it’s easy to forget to contribute to your spousal RRSP, assuming you have one.

The spousal RRSP lets the high-income earner contribute even more cash to a retirement account. The contributor gets a tax refund based on his or hers income status, but, when it’s withdrawn, the tax hit is determined by the recipient’s tax bracket.

It’s a great way to mitigate taxes, says Minicucci, but only if you use it. So don’t forget that your partner’s account also needs to be taken care of.

5. Double-check your financial institution’s hours

If you’re not an online investor then you’ll either need to go to your financial institution or give them a call to make your RRSP contribution. Some places may stay open later on RRSP deadline day, but it’s best to check now to make sure the one you plan to go visit is one of them.

Online investors can likely wait until the last second to contribute, but if you want to make a payment over the phone, be sure to account for the time it’ll take to get through those annoying automated menus.

When the deadline day comes and goes, it’s probably a good idea to come up with some sort of plan to make sure you’re not panicking next year. Regular monthly contributions will do the trick. If you must contribute minutes before midnight, at least make sure you know what you’re doing so you don’t regret it later.