The RRSP Deadline Strategy: Tax-Smart Steps for Affluent Professionals

March 2 is approaching fast. Do you have a strategy to deploy your investment capital during the RRSP contribution deadline period?

RRSP season is when affluent Canadians can turn a routine contribution into a deliberate tax decision. The closer you get to the RRSP contribution deadline, the more tempting it is to focus on “getting the money in” rather than getting your strategy right.

For the 2025 RRSP season, the CRA lists March 2, 2026 as the deadline to contribute to an RRSP or related plans and still claim the deduction against your 2025 income. If you contribute after the RRSP contribution deadline, the contribution can still be value, but the deduction generally shifts to a later tax year, which throws off your tax planning and contribution planning math.  

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STEP 1: Separate the RRSP contribution limit from your personal deduction limit

The most common mistake I see being made by affluent professionals and business owners is anchoring and planning based on the headline RRSP contribution limit instead of their actual deduction limit.

CRA’s published RRSP dollar contribution limit for 2025 is $32,490 (for 2026 it will be $33,810). This is what many people casually call the RRSP contribution limit, but it is only the maximum annual ceiling before personal adjustments.

Your real planning number is your RRSP deduction limit on your own Notice of Assessment (available in your ‘CRA My Account). It reflects the prior-year earned income, pension adjustments and any unused room carried forward. So in fact, your RRSP room is tied to your personal situation and income as confirmed on your Notice of Assessment.

The pattern is clear. Chasing forecasts typically results in buying high after rallies and selling low during corrections, the opposite of successful investing.

If you are aiming to maximize your RRSP contribution limit before the RRSP contribution deadline, start by confirming your exact deduction room. Otherwise, you risk contributing more than you can deduct right now.

STEP 2: Avoid overcontributions that create tax liability

Busy professionals and high-income business owners sometimes overcontribute unintentionally especially when there are multiple investment accounts across different banks and account types such as RRSPs, spousal accounts, group or corporate plans and even late receipts.

The CRA rule is straightforward. If your unused contributions exceed your RRSP deduction limit by more than $2,000 you will be assessed a 1% per month tax on the excess. This penalty can quietly accumulate until you correct it or create new room to absorb it.

For practicality, most clients should be on a set contribution plan monthly with a review near the end of the year based on your Notice of Assessment to adjust as necessary. Or ensure a review is conducted in January every year based on this assessment and to contribute a lump sum before the contribution deadline.

STEP 3: Use a spousal RRSP to manage future tax brackets

A spousal RRSP is not only an efficient income-splitting idea. It is a retirement income design tool that balances out tax liabilities. When one spouse is likely to retire with a higher taxable income than the other, a spousal RRSP can help smooth out future withdrawals across two tax returns, potentially lowering the higher tax bracket and reducing taxes.

The key is respecting the attribution window. If you want to avoid having a spouse’s withdrawal taxed back to the contributor, you should not contribute to any of your spouse’s RRSPs in the year of withdrawal or either of the preceding two years. This is why planning is key to ensuring a multi-year investment plan for a spousal RRSP. This supports a more predictable retirement tax profile, which may be more valuable than maximizing a single year’s refund.

• Steve Says: “Treat RRSP season like capital allocation, not a shopping deadline. I would rather see a client make a sustainable contribution they can hold through volatility than chase a bigger deduction that forces a later sale. The tax refund or tax mitigation is the byproduct, but disciplined investing is the strategy.”

STEP 4: RRSP vs TFSAs for affluent Canadians

The RRSP vs TFSA question is rarely about which account is ‘better.’ It is about your current tax rate, your future tax rate, and how much flexibility you want.

RRSPs defer tax in your current filing year and can be advantageous if your marginal tax rate is expected to be lower in retirement. While investing into TFSAs can be better if your income will be higher later. The TFSA dollar limit is $7,000 for 2025 and 2026.

Here is a simple RRSP vs TFSA test you can apply:

• Use RRSP contributions when your current marginal rate is high and you expect more manageable taxable income later, or if you want to systematically reduce taxable income in peak earning years.
• Use TFSA contributions when flexibility matters, when future taxable income may remain high or you tax-free withdrawals that will not add to taxable income in a given year
• If you have maximized contribution limits consistently for both RRSPs and TFSAs there are many other strategies to mitigate either income and capital gains taxes that require an advisory conversation, such as tax loss selling or flow-through shares just to name a couple.

For many households its not an either-or conversation for RRSPS and TFSAs, yet rather a sequencing conversation.

RRSP Checklist for affluent Canadians

• Confirm your personal deduction limit on your latest Notice of Assessment before acting on the published RRSP contribution limit.
• If you are contributing close to the contribution deadline, account for processing and settlement not just the day of submittal.
• Coordinate spousal RRSP contributions with any planned withdrawals to avoid attribution.
• Keep a buffer to reduce the risk of over contributing beyond the $2,000 threshold that will trigger a penalty tax.
• Logically check any RRSP vs TFSA investment decisions against expected retirement tax bracket and liquidity needs.

If you are a client, thank you for taking the time to read this and I look forward to our next conversation. Please feel free to share this with your friends and family who may be in need of another viewpoint.

If you are looking for a second opinion on your portfolio or would like to have a planning conversation tailored to your needs, book a no-obligation complimentary portfolio review with me today.

Sources

1. Canada Life. “Important Savings Deadlines and Limits for 2025.” Canada Life, Oct. 29, 2025. https://www.canadalife.com/investing-saving/saving/important-savings-deadlines-limits.htm 
2. Canada Revenue Agency. “Due Dates and Payment Dates: Personal Income Tax.” Government of Canada, updated 2025. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/important-dates-individuals.html 
3. Canada Revenue Agency. “Calculate Your TFSA Contribution Room.” Government of Canada, updated 2025. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-free-savings-account/contributing/calculate-room.html
4. Canada Revenue Agency. “Where Can You Find Your RRSP Deduction Limit.” Government of Canada, updated 2025. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/contributing-a-rrsp-prpp/where-you-find-your-rrsp-prpp-deduction-limit.html
5. Canada Revenue Agency. “How Contributions Affect Your RRSP Deduction Limit.” Government of Canada, Apr. 28, 2025. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/contributing-a-rrsp-prpp/contributions-affect-your-rrsp-prpp-deduction-limit.html
6. Ontario Securities Commission. “The Top Differences Between TFSAs, RRSPs and FHSAs.” GetSmarterAboutMoney.ca, May 8, 2025. https://www.getsmarteraboutmoney.ca/learning-path/rrsps/the-top-differences-between-tfsas-rrsps-and-fhsas/
7. Canadian Investment Regulatory Organization. “Invest Smart: Taxes and Investing.” CIRO Office of the Investor, updated 2024. https://www.ciro.ca/office-investor/investing-basics/invest-smart-taxes-and-investing

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