How to help your clients this RRSP season

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How to help your clients this RRSP season

RRSP season is upon us. As the key time of year for a financial advisor, this is when you most need to connect with your clients.

Do keep in mind that many people need a little prodding (and sometimes a lot!) when it comes to making an RRSP contribution. And, while RRSPs may be top of mind for you, they may not be as pervasive in the minds of your clients.

Therefore, be prepared to approach your clients early in the season, and to follow up several times before the deadline on March 1, 2019.

Client opportunities

As an advisor, help your clients by looking for opportunities where they should be thinking about making or boosting their contribution. Use this checklist of reasons to contribute, keeping in mind that each client’s situation, and therefore what motivates them to contribute, will be different.

Reasons to contribute:

  • To maximize your tax deduction.
  • To tap unused contribution room from previous years.
  • To get a jump start on the March 1, 2019 deadline by contributing early so you can stop worrying about it.
  • To gain tax flexibility by contributing between January 1 and March 1, 2019 so you can apply the deduction to either your 2018 or 2019 tax return.
  • To accumulate savings for later access through the Home Buyers’ Plan or Lifelong Learning Plan.
  • To contribute towards a Spousal RRSP, which gives you a deduction and increases your spouse’s (or common-law spouse’s) income at retirement.
  • To move an unregistered investment (such as securities or GICs) into a registered plan.
  • To make your final RRSP contribution by December 31 if you turned or will be turning 71 this year.

3 things to find out

You may also have to help your clients with some basics around contributing. Here are three key questions to ask:

  • What’s your contribution limit for this year? If they’re not sure, they can find it on their last Notice of Assessment. Or, they can quickly calculate 18% of their previous year’s earned income, found in Box 14 of their T4 slip(s).
  • Do you have any unused contribution room carried forward? This is also found on their Notice of Assessment. If for any reason this is still uncertain, the client can call the Tax Information Phone Service (TIPS) at 1-800-267-6999. They’ll need their Social Insurance Number, birth date and previous tax return.
  • If you don’t have enough money to contribute this year, could you apply for an RRSP loan? Directing any tax refund generated towards the loan balance and then paying the remainder back within the first year or two can be a beneficial long-term financial strategy.

With your support and assistance, and some gentle prodding, you can get your clients on track for RRSP season — and a more financially secure future.

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