Reminder of RRSP Contribution Deadline

The deadline to contribute to your RRSP for the 2024 tax year is quickly approaching on March 1st. Making RRSP contributions can be a smart financial move, as they are tax-deductible and can lower your taxable income—potentially resulting in a tax refund or reducing the amount you owe, depending on your unique situation.

If you’re a client and would like assistance with making a contribution before the deadline or need guidance on whether contributing is the right choice for you, please don’t hesitate to reach out. Getting in touch early ensures we have enough time to review your circumstances and handle the necessary paperwork.

Other Strategies to Consider in 2025

Max out your TFSA

TFSAs are among the simplest and most flexible accounts to manage, offering tax-free growth, no penalties for withdrawals, and no rigid repayment or usage rules. Any income earned in your TFSA—whether from interest, dividends, or capital gains—is completely tax-free, allowing you to keep more of your returns.

In 2025, the annual TFSA contribution limit will increase by $7,000, bringing the lifetime maximum for those eligible since 2009 to $102,000.

Tip: If you have funds sitting in a non-registered investment account, consider using some of that money to maximize your TFSA contributions. Doing so can allow your investments to grow tax-free, simplify your tax returns, and help you retain more of your earnings.

Utilize the New FHSA

The First Home Savings Account (FHSA) is designed to help aspiring first-time homebuyers maximize their savings. Account holders can contribute $8,000 per year, up to a lifetime maximum of $40,000. Similar to the RRSP Home Buyers’ Plan, the FHSA offers both tax-deductible contributions and tax-free withdrawals; however, unlike the RRSP Home Buyers’ Plan, withdrawals do not have to be repaid.

You might be eligible to open an FHSA if you are a resident of Canada, at least 18 years of age, and you:

• Have never owned a home.
• Are buying a home after a divorce or separation.
• Have not owned a home in the past five years.

If you’ve been saving in your RRSP and would like to switch to an FHSA, good news: you are allowed to transfer funds from your RRSP to your FHSA up to the annual contribution limit, provided the funds are transferred directly from one to the other (i.e., not cashed out and then re-contributed).

Tip: If you’re a parent looking to help your adult children save for their first home, while you can’t contribute to an FHSA in their name directly, you can gift them the money for them to contribute themselves.

Make a Plan for Your RRSP Home Buyers’ Plan (HBP) Repayments

The RRSP Home Buyers’ Plan allows you to withdraw up to $60,000 from your RRSP tax-free to use towards the purchase of your first home.

If you withdrew money from your RRSP under the Home Buyers’ Plan, here’s what you need to know to start planning your repayments:

• HBP withdrawals must be repaid to your RRSP over a period of no greater than 15 years.
• Normally, you have a 2-year grace period before your repayment period starts. However, if you make your withdrawal between 2022–2025, that 2-year grace period is extended to 5 years.
• To calculate your annual repayment obligation, simply take the amount you withdrew and divide it by 15.

For example, if you withdrew $30,000, you would need to repay $2,000 per year for the next 15 years, or $166.67 per month.

Tip: Starting your repayments early, even during the grace period, can help reduce your financial obligations later. For example, $30,000 repaid over 20 years (15 + the 5-year grace period) would be $1,500 per year instead of $2,000.

Time Your RESP Contributions

The RESP (Registered Education Savings Plan) is an incredible tool to save for your child’s education. You can contribute up to $50,000 per child but, to get the most out of it, spreading out contributions over several years is the way to go thanks to the Canada Education Savings Grant (CESG).

Here’s why: the CESG is a government program that matches 20% of your annual contributions, up to a $2,500 annual limit per child, providing up to $500 in free money each year. Even better, if you miss a year, you’re allowed to catch up and still receive the full grant, but only one year at a time. This means the most you can contribute in a given year and receive the full grant is $5,000. Contributions above the maximum will not be eligible for the CESG either now or in the future.

Taking control of your financial future is about making smart, timely decisions—and opportunities like RRSP contributions, TFSAs, the new FHSA, and RESP planning are excellent ways to get ahead. By leveraging these tools, you can optimize your savings, reduce your tax burden, and set yourself up for long-term success.

At Spero Financial Group, we’re here to help you navigate these options and create a plan tailored to your unique goals. Let’s work together to make 2025 your most financially confident year yet—contact us today to get started!