Summer 2026 Newsletter 102A
How to Catch Up on Your RRSP Contributions
How to Catch Up on Your RRSP Contributions
If you have ever felt behind on your RRSP, you are not alone. Life gets in the way, rent, a mortgage, kids, a period of lower income, and RRSP contributions get pushed to the back of the list.
Here is the good news: unused RRSP contribution room does not disappear. It accumulates year over year, and many Canadians are sitting on far more room than they realize. Catching up on those contributions is one of the most straightforward ways to reduce your tax bill.
Here is how it works.
What Is RRSP Contribution Room?
Each year, the Canada Revenue Agency (CRA) calculates how much you are allowed to contribute to your RRSP. The formula is 18% of your prior year’s earned income, up to an annual maximum set by the government, which is updated periodically and published by the CRA each year.
If you do not contribute the full amount in a given year, the unused room carries forward to the following year. And the year after that. And so on.
This carry-forward provision is what makes catch-up contributions possible. Someone who has been contributing inconsistently over the past decade may have accumulated tens of thousands of dollars in available room.
How to Find Your Contribution Room
The most reliable way to see your available RRSP room is through your CRA My Account, the federal government’s online portal. Once logged in, look for your Notice of Assessment (NOA) from last year’s tax return. Your RRSP deduction limit for the current year is listed there explicitly.
If you have not set up a CRA My Account, the same information appears on the paper NOA mailed to you after your return is processed. You can also call the CRA directly to confirm your available room.
Your available room is the combined total of any room you did not use in prior years, plus the new room added based on last year’s income.
The Tax Benefit of Catching Up
RRSP contributions reduce your taxable income dollar for dollar. If you are in a 40% combined federal and provincial marginal tax bracket and contribute $10,000 to your RRSP, you reduce your taxable income by $10,000, which means approximately $4,000 less in taxes owed.
That is the core value of catching up. Every dollar of unused room you do not use is a tax deduction sitting on the table.
The benefit compounds over time as well. Money contributed to your RRSP grows tax-sheltered until withdrawn. The earlier it is contributed, the longer it has to grow without being taxed each year.
The RRSP Catch-Up Loan Strategy
One approach many Canadians use is an RRSP catch-up loan, a short-term personal loan taken specifically to make a large RRSP contribution all at once.
Here is the idea: you borrow a lump sum, deposit it into your RRSP before the deadline, and use the tax refund you receive to pay down a significant portion of the loan. If your refund covers half the loan, for example, you are left with only half the balance to pay off over the following months.
This strategy works best when:
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You have a meaningful amount of carry-forward room built up
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You are in a higher tax bracket, which produces a larger refund
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You can realistically pay off the loan within 12 months
The interest on an RRSP loan is not tax-deductible, so the goal is to repay it quickly. Holding the loan for an extended period reduces the overall benefit of the strategy.
Many Canadian banks and credit unions offer RRSP loans specifically for this purpose, often at competitive rates and with repayment terms designed around the expected tax refund timeline.
Timing: The RRSP Deadline
RRSP contributions for a given tax year must be made by 60 days after December 31, which works out to March 1 in most years, or March 2 when the following year is a leap year. Contributions made in January or February of the new year can be applied to either the previous tax year or the current one, giving you some flexibility.
Many Canadians wait until close to the deadline to contribute. While this is common, making contributions earlier in the year, or throughout the year, means the money spends more time growing inside the plan.
Over-Contributing: What to Watch
There is one important guard rail: RRSP over-contributions above a $2,000 lifetime buffer are penalized at 1% per month on the excess amount. This rarely happens accidentally, but it is worth confirming your available room before making a large lump-sum deposit.
Your confirmed room from your most recent NOA, minus any contributions already made in the current year, gives you your remaining available room.
When an RRSP Makes the Most Sense
The RRSP is most valuable when you are in a higher tax bracket now than you expect to be in retirement. Contributing while earning at a high rate and withdrawing at a lower rate in retirement produces the greatest tax advantage.
If you are in a lower bracket now, it can sometimes make more sense to contribute to a TFSA first and save your RRSP room for higher-earning years. Both accounts have their place, and many Canadians use both, the RRSP for the tax deduction today, the TFSA for tax-free access later.
Putting It Together
If you have years of unused RRSP room, that room represents real tax savings that are still within reach. Catching up does not require a windfall. It can be done gradually, contributing more each year than required, or all at once using a short-term loan.
Check your CRA My Account for your current room, run the numbers on what a contribution would mean for your tax return this year, and decide whether catching up makes sense for your situation. The deadline comes every early March, and with every year that passes, the carry-forward room keeps growing.
This content is provided for general informational purposes only. It is not intended to provide investment, tax, or legal advice, and should not be relied upon as such.
Sources:
Executive summary – Robin Esrock
What is the big “bucket list” trip you’ve been putting off for years? Is it touring Europe with your grandkids? Maybe sailing the Caribbean with your spouse? Or maybe something right here in our own incredible Canadian backyard?
Last month, we hosted a private conversation with author, travel writer, and TV personality Robin Esrock, and he spent the evening outlining why now – not later – is the time to plan that dream vacation with your family.
Here are his three biggest beliefs on making that dream a reality:
- Don’t wait for tomorrow, as one day you will run out of tomorrows – if there was one thing to take away from our time with Robin, this was it. He relayed the reality check he experienced when his own father had a sudden “widowmaker” heart attack… time is short, so don’t wait for tomorrow – start planning that trip today!
- Take your (entire) family! – These trips aren’t just about the experience, they are about making memories, and memories are best when shared with the people you love – so make plans to bring your family! Don’t let age hold you back; there are companies out there that can accommodate the very young and the very “experienced” among us.
- Get off the beaten trail – the best memories happen when you are surprised and delighted. Visiting the castle you’ve read so much about is one thing, but how many people you know have seen a polar bear in real life? Or visited a true ghost town?
As a Family Office, we are big believers that Mom & Dad (or Grandpa & Grandma) should plan and fund a once-in-a-lifetime family trip. We can put you in touch with the right people at the right companies to make that dream vacation a reality.
What Is Participating Whole Life Insurance?
What Is Participating Whole Life Insurance?
Most people buy life insurance for one reason: to make sure their family is protected if something happens to them. But there is a type of life insurance that does something more – it builds value over time while you are still alive. That type is called participating whole life insurance, and it works very differently from the term policies most Canadians are familiar with.
Here is what it means, how it works, and whether it might be a fit for you.
Permanent Coverage That Does Not Expire
Term life insurance covers you for a set period – 10, 20, or 30 years. Participating whole life insurance is permanent. It covers you for your entire life, as long as premiums are paid, and the death benefit is guaranteed.
That permanence is the first major difference. But the bigger difference is what happens to your premiums while you are alive.
With a term policy, your premiums go entirely toward the cost of insurance. With participating whole life, the insurer pools premiums into a participating account that is professionally managed. Dividends may be paid when the account’s experience is favourable, based on factors such as investment returns, expenses, and mortality experience.
How Dividends Work
The word “dividend” here is different from stock dividends. In the context of a participating whole life policy, a dividend is a share of the insurance company’s surplus – essentially, the company returning a portion of the money when investment performance, claims experience, and expenses go better than expected.
These dividends are not guaranteed. They are declared each year by the insurance company based on how the participating account performed. That said, many Canadian participating insurers have long histories of paying dividends, though past performance does not guarantee future results.
When you receive a dividend, you have a few options for how to use it:
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Take it as cash. The dividend is paid to you directly.
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Apply it to your premium. It reduces how much you pay out of pocket.
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Buy additional paid-up insurance. This is the most common choice. The dividend purchases more coverage, which in turn earns its own dividends. Over time, this compounds.
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Leave it on deposit. The dividend sits with the insurer and earns interest.
Most policyholders who hold participating whole life for the long term choose to purchase additional paid-up insurance, because it accelerates both the death benefit and the cash value of the policy.
The Cash Value
One of the most distinctive features of a participating whole life policy is that it builds cash value. The policy builds guaranteed cash value as part of its structure, and dividends can add a non-guaranteed layer of growth if they are used to buy paid-up additions.
The policy accumulates cash value that you may be able to access, subject to policy terms, in a few ways:
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Policy loans. You can borrow against the cash value without going through a lender or credit check. Policy loans do not have fixed repayment schedules, but any unpaid balance can reduce the death benefit.
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Surrendering the policy. If you decide you no longer need the coverage, you can cancel the policy and receive the accumulated surrender value. The tax treatment on surrender can be technical and depends on the policy’s adjusted cost basis — the disclaimer at the end of this article applies here.
The cash value grows on a guaranteed basis, separate from the dividends. The dividends, if used to purchase paid-up additions, add a non-guaranteed layer of growth on top.
Who Is This Type of Policy For?
Participating whole life is not the right fit for every situation. Because premiums are higher than term insurance, it is most commonly used by people who have a long-term need for life insurance and who can sustain the premium over time.
Some of the most common situations where it makes sense:
Families building long-term wealth. For parents who want to ensure a guaranteed death benefit no matter when they pass, plus build a tax-advantaged asset over decades, participating whole life offers both.
Business owners and incorporated professionals. A participating whole life policy held inside a corporation may offer a tax-efficient approach to building cash value inside a permanent policy, depending on the structure and the corporation’s specific situation. It can be used by incorporated professionals – such as dentists and physicians – to redirect excess corporate cash into a long-term, protected asset.
Estate planning. For those who want to leave a specific, guaranteed sum to their heirs or a charitable organization, a participating whole life policy creates a known outcome – the death benefit- regardless of when death occurs.
High net worth individuals. When other registered accounts (TFSA, RRSP) are maximized, participating whole life can offer a tax-efficient way to build cash value inside a permanent policy, outside of registered limits.
How It Fits Alongside Term Insurance
Term and participating whole life insurance are not competitors- they serve different purposes, and many Canadians use both at different stages of life.
Term insurance is a straightforward, affordable way to protect your family during the years it matters most – while a mortgage is being paid down, while children are young, or while income replacement is the primary concern. It does exactly what it is designed to do.
Participating whole life steps in when the need for coverage is permanent, when building long-term cash value matters, or when the policy is part of a broader estate or corporate strategy. The two products often complement each other well, and choosing one does not mean ruling out the other.
What to Take Away
Participating whole life insurance combines permanent death benefit protection with a growing cash value and the potential for dividends. It is a longer-term commitment with higher premiums, and it is designed for situations where permanence, cash value, and legacy planning are part of the picture.
If you are considering permanent life insurance, take time to review how dividend performance has held up at the insurer you are looking at, understand the various dividend options, and think through whether the long-term commitment fits your situation.
This content is provided for general informational purposes only. It is not intended to provide investment, tax, or legal advice, and should not be relied upon as such. Policy design, dividend scale performance, cash value growth, and tax treatment vary by insurer and by the specific policy contract. Always review the policy illustration and contract terms carefully.
Sources:
What Is Life Insurance and How Does It Work?
Insurance products and services are provided through Assante Estate and Insurance Services Inc.
This material is provided for general information and should not be considered individual investment, tax, accounting, or legal advice, or construed as an offer or solicitation to buy or sell securities.
The statements and opinions expressed are those of the presenter(s) and not necessarily those of CI Assante Wealth Management Ltd. All opinions expressed and information provided herein are subject to change without notice. Every effort has been made to compile this material from reliable sources as at the date indicated however, no warranty can be made as to its accuracy or completeness Market conditions may change which may impact the information contained herein. All charts and illustrations in this document are for illustrative purposes only and they are not intended to predict or
project investment results. In considering any particular investment or investment strategy, please remember that past performance is no guarantee of future performance. We caution you not to place undue reliance on any statements that are predictive in nature, depend upon or refer to future events or conditions, as a number of factors could cause actual events or results to differ materially from those expressed in any forward-looking statement, including economic, political and market changes and other developments. The information contained herein may not apply to all types of investors. Before acting on the information presented, please seek professional financial advice based on your personal circumstances.
CI Assante Wealth Management Ltd. is a Member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization.
What Is Life Insurance and How Does It Work?
Have you ever wondered what would happen to your family’s finances if you were no longer here? It’s not an easy thought. But it is an important one. Life insurance is designed to protect the people you care about most if something unexpected happens.
Many people avoid this topic because it feels uncomfortable or confusing. The good news is that life insurance is actually quite simple once you break it down.
What Is Life Insurance?
Life insurance is a contract between you and an insurance company. You pay a regular payment called a premium. In return, the insurance company agrees to pay a lump sum of money to someone you choose (your beneficiary) if you pass away.
That lump sum is called a death benefit. In most cases, it is paid tax-free to your beneficiary.
Think of life insurance like a safety net. You hope it is never needed. But if it is, it can help your family stay financially stable during a very difficult time.
Millions of Canadians have some form of life insurance coverage. For many families, it plays an important role in protecting income and covering large expenses.
How Does Life Insurance Work?
The process is straightforward.
First, you apply for coverage. The insurance company reviews details such as your age, health, lifestyle, and sometimes your occupation. This helps them decide your premium and whether you qualify.
Once approved, you begin paying premiums. As long as you keep paying, your coverage remains active.
If you pass away while the policy is active, your beneficiary files a claim. The insurance company reviews the claim and then pays out the death benefit.
Your beneficiary can use the money for any purpose, such as:
- Paying off a mortgage
- Covering funeral expenses
- Replacing lost income
- Paying off debt
- Supporting children’s education
The goal is to reduce financial stress at a time when your family is already dealing with emotional loss.
The Two Main Types of Life Insurance
Most people choose between two main types of coverage: term life insurance and permanent life insurance.
Term Life Insurance
Term life insurance covers you for a set period of time, such as 10, 20, or 30 years.
It is usually the most affordable option, especially for young families. If you pass away during the term, the policy pays out. If the term ends and you are still living, the coverage ends unless you renew it.
Term insurance works well for temporary needs. For example:
- Protecting your income while your children are young
- Covering a mortgage while the balance is high
- Replacing income during your working years
It is simple and focused on protection.
Permanent Life Insurance
Permanent life insurance covers you for your entire lifetime, as long as premiums are paid.
It also includes a savings feature called cash value. Over time, this value can grow on a tax-deferred basis.
Permanent coverage is usually more expensive than term coverage. However, it can support longer-term goals such as:
- Covering final expenses
- Leaving money to family or a charity
- Helping manage taxes at death
- Supporting estate planning goals
The right type of coverage depends on your needs, timeline, and budget.
How Much Coverage Do You Need?
This is one of the most common questions people ask.
A good starting point is to ask: If I were gone tomorrow, what financial gap would my family face?
You may want to consider:
- Your mortgage balance
- Other debts
- Ongoing living expenses
- Childcare costs
- Future education expenses
- Final expenses
Some people use a simple guideline like 10 times their annual income. But that is only a starting point. Your personal situation matters more than any rule of thumb.
For example, someone with no dependents and little debt may need very little coverage. A household with young children and a large mortgage may need much more.
The goal is to match coverage with real responsibilities.
Is Life Insurance Expensive?
Many people assume life insurance costs more than it does. In reality, term coverage can be very affordable, especially if you are young and in good health.
Your premium is based on factors such as:
- Age
- Health history
- Smoking status
- Coverage amount
- Type of policy
The younger and healthier you are when you apply, the lower your premium is likely to be.
Waiting can increase the cost. Health can change over time. Securing coverage earlier can help lock in lower rates.
Who Should Consider Life Insurance?
Life insurance is not necessary for everyone. But it is important for many people.
You may want to consider coverage if:
- Someone depends on your income
- You share debts with a partner
- You have children
- You own a home
- You want to leave money behind for loved ones
Even stay-at-home parents may need coverage. If they were not there, the cost of childcare and household support could be significant.
In Canada, life insurance benefits are generally paid tax-free to beneficiaries. This helps ensure that the full amount can be used for its intended purpose.
Final Thoughts
Life insurance is a practical tool. It helps protect the people you care about from financial hardship if something unexpected happens. It can provide stability, cover major expenses, and support your family’s future.
If you are unsure whether you need coverage, start by reviewing who depends on you and what financial responsibilities you carry. A short conversation can bring clarity and peace of mind.
If you would like to explore how life insurance fits into your overall strategy, I would be happy to guide you through the options and help you make an informed decision.
Insurance products and services are provided through Assante Estate and Insurance Services Inc. The opinions expressed are those of the author and not necessarily those of CI Assante Wealth Management Ltd. This material is provided for general information and the opinions expressed and information provided herein are subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on the information presented, please seek professional financial advice based on your personal circumstances.