CPP Benefit used as RRSP Contribution

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Peter
Posts: 1
Joined: Wed Sep 21, 2005 10:49 pm

CPP Benefit used as RRSP Contribution

Post by Peter »

<div align="left"></div id="left">My wife who is a Canadian and a US permanent resident turned 60 this May. By applying for CPP benefit now she would get
about CAD 235 a month. Is it possible to have this amount deposit
on a monthly basis to her RRSP(TD Waterhouse Canada)and in doing so
defer the tax liability? Is it advantageous when filing jointly?
Thanks for any input.
Peter
nelsona
Posts: 18359
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

If she lives in US, her CPP is not taxable in canada, so there is no point in putting it into her RRSP. It is only taxable in US, exactly like Social Security (85% taxable).

Note that this will eventually reduce her SS payments due to the Windfall Elimination Provisions.

Remember to claim OAS for her when she turn 65, too. This will be based on the ammount of adult years she lived in canada. It too is treated like Social Security.

And, unless she qualifies for SS on her own merits, be sure that she can provide her CPP history to the SSA to collect whatever SS she is entitled to.

If she lives in canada, then she can put whatever monies she wants in her RRSP, but she needs to have contribution room from past earned income. CPP is not earned income, so would not add to any contribution room.

<i>nelsona non grata... and non pro</i>
Jaspal
Posts: 72
Joined: Wed Jan 19, 2005 6:45 pm

Post by Jaspal »

A related question: Can someone contribute to RRSP even after the age of 60? Thanks.
Carson
Posts: 182
Joined: Wed Oct 27, 2004 1:00 pm
Location: Toronto

Post by Carson »

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote"><i>Originally posted by Jaspal</i>

A related question: Can someone contribute to RRSP even after the age of 60? Thanks.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">

Yes, you can contribute - assuming you have contribution room - until Dec 31 of the year in which you turn 69. You can also make spousal RRSP contributions up to Dec 31 of the year your spouse turns 69.

Carson
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