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Strategic Alliances in a Shifting Global Landscape

In a world marked by geopolitical tensions and shifting alliances, Russian President Vladimir Putin and Chinese President Xi Jinping have positioned themselves as defenders of a new world order. Their recent meeting in Moscow, coinciding with the 80th anniversary of the end of World War II, underscored their commitment to countering Western influence and promoting a multipolar global system. During the talks, Putin and Xi emphasized their shared vision of international stability, rejecting what they described as "unilateralism and bullying"—a veiled reference to the United States. Xi reaffirmed China's support for Russia, highlighting their strategic partnership and mutual interests in shaping global governance. The leaders also pledged to safeguard the authority of the United Nations and advocate for the rights of developing nations. This alliance comes at a critical time, as both nations face economic and political challenges. Russia continues to navigate Western sancti...
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How to Make the Most of Your RRSP Contribution Before the 2024 Deadline

 

The Registered Retirement Savings Plan (RRSP) is one of the best tools for Canadians to save for retirement and reduce their taxes. However, many people make mistakes or miss opportunities when it comes to their RRSP contributions. Here are some tips and tricks to help you optimize your RRSP before the deadline of February 29, 2024.

  • Contribute early and often: The sooner you make your RRSP contribution, the more time your money will have to grow tax-deferred. You can also avoid the last-minute rush and stress of trying to find the funds to contribute. If possible, set up a pre-authorized contribution plan that automatically deducts a certain amount from your bank account every month or pay period. This way, you can benefit from dollar-cost averaging and smooth out the market fluctuations.
  • Know your contribution limit: The RRSP contribution limit for 2023 is $30,780 or 18% of your 2022 earned income, whichever is lower. You can also carry forward any unused contribution room from previous years. To find out your exact limit, check your latest Notice of Assessment from the Canada Revenue Agency (CRA) or log on to your online account. If you over-contribute, you may face a penalty of 1% per month on the excess amount, unless it is within the $2,000 lifetime over-contribution allowance.
  • Claim your deduction strategically: You can claim your RRSP contribution as a deduction on your 2023 income tax return, which may lower your taxable income and generate a tax refund. However, you don’t have to claim the deduction in the same year you make the contribution. You can defer it to a future year when you expect to have a higher income and tax rate. This way, you can maximize your tax savings and reinvest your refund into your RRSP or other savings vehicles.
  • Avoid making withdrawals: Unless it is absolutely necessary, you should avoid taking money out of your RRSP before retirement. Any withdrawal will be subject to withholding tax and added to your taxable income for the year. You will also lose the contribution room permanently and miss out on the potential growth of your investments. The only exceptions are the Home Buyers’ Plan (HBP) and the Lifelong Learning Plan (LLP), which allow you to withdraw up to $35,000 and $20,000 respectively from your RRSP to buy your first home or fund your education, as long as you repay the amount within a specified period.
  • Plan for income splitting with your spouse: If you expect your spouse to have a significantly lower retirement income than you, you may want to consider contributing to a spousal RRSP. A spousal RRSP is an RRSP that you contribute to on behalf of your spouse, but you still get the tax deduction. When your spouse withdraws the money from the spousal RRSP, it will be taxed at their lower rate, which may reduce your overall tax burden as a couple. This strategy may be especially beneficial if you are not able to achieve optimal results from pension income splitting, which allows you to allocate up to 50% of your eligible pension income (including RRIF income) to your spouse.

By following these tips and avoiding common mistakes, you can make the most of your RRSP contribution and prepare for a comfortable and tax-efficient retirement. Remember, the deadline for the 2023 tax year is February 29, 2024, so don’t delay and start planning today.

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