Laptop keyboard, online calculator.
Banks used to stay open up late ahead of the RRSP deadline because so many procrastinators waited until the last minute.
Not any longer. Perhaps that reflects the credit crisis hangover. But it may also be the result of the increase in online banking services.
A wealth of web resources now let you plan your saving strategy in the comfort of your own home. For all you DIYers and those who just want to keep their advisers honest, here are some online RRSP resources worth checking out:
RRSP refund calculator
Ernst & Young have some great online tax calculators. Their RRSP refund calculator allows you to plug in your income and RRSP contribution amount to see just how much tax relief you could be looking at. Since large contributions can drop you down a tax bracket or two, it's not just as simple as multiplying your contribution amount by your top tax bracket. Many times you can end up with less than you think.
Personal income tax calculator
Another bookmark-worthy calculator from Ernst & Young is their simple income tax calculator If you are self-employed, you can quickly gauge how much tax you would pay for various levels of taxable income. Since my income taxes are not deducted at source, I use it to track how much I have to keep for the tax man at the end of the year. I know I'm not alone.
Pay down the mortgage or contribute to an RRSP?This calculator is not for the uninitiated. With 11 inputs, the validity of the results can vary greatly depending on the data you enter. While a glossary and instructions are provided, you may want to take the results and talk them over with someone before making any decisions. For example, you'll need to estimate your tax bracket in retirement – which requires having projections in place about your future income. But overall, the calculator provides some good food for thought.
RRSP vs TFSA
If you like rows of data in spreadsheets, you'll like the detail offered in the RRSP vs TFSA calculator provided by the fine folks at TaxTips.ca. The same caveats apply regarding multiple inputs. And if you don't know what you're doing, you can have some inaccurate results. Since the introduction of the TFSA, the debate as to which tax-sheltered account is better for you now ranks up there with the "RRSP vs mortgage" and "lease or buy a car" debates. There is no one size fits all advice, but this calculator can help steer you in the right direction.
Preet Banerjee, a personal finance expert, is the host of Million Dollar Neighbourhood on The Oprah Winfrey Network. You can read his blog at WhereDoesAllMyMoneyGo.com and follow him on Twitter at @preetbanerjee.
Preet Banerjee