Can I still contribute to an RRSP?

Question: I listen to you always on CBC. My question today is: for how long can you buy RRSPs?  I am 66 years old, will be semi-retiring in March, and I will be receiving a small Alberta Local Authorities Pension. I will be doing a bit of “private practice” and a bit of “contracting out” services. What I don’t know about is, if you are receiving a small pension, receiving CPP and Old Age Security, can you still buy RRSPs? – G.L., Calgary


You can invest in RRSPs until the end of the year in which you turn 69, as long as you have what is known as “earned income”. Your pension payments do not come under that, but any money you earn from the work you’re planning to do certainly will. Your contribution limit will be based on 18% of your previous year’s earned income.

So for 2001, you can contribute 18% of your year 2000 earned income to an RRSP, less any pension adjustment — ask your pension plan administrator about that. In 2002, you can contribute 18% of 2001 earned income, including your employment income until the time you stop work. After that, your RRSP entitlement will be based on whatever part-time income you earn, unlesyou have carry-forward credits from previous years. If so, you can contribute the full amount of those any time. See your latest notice of assessment from the Canada Customs and Revenue Agency to determine if you have any carry-forward room. – G.P.