Know that the game is worth the candle even with low incomes!
First case. John earns $60,000 a year and Jane $40,000. They have two children under the age of six. If the couple had contributed a total of $3,000 to their RRSPs, they would have paid $23,006 in taxes and contributions instead of $24,119, which is $1,113 less than if they contributed nothing to their RRSPs. Moreover, it would allow Jeanne and Jean to increase by $291 the social-fiscal measures to which they are entitled (Canadian Family Allowance and Quebec Family Allowance).
In the end, the actual value of their $3,000 contribution would be only $1,596, and the total real savings would be 46.8% thanks to RRSP.
Second case. Zhanna is a single mother of two children under the age of six. Her annual income is $65,000. By contributing $3,500 to her RRSP, she would have paid $13,702 in taxes and contributions instead of $15,002, $1,300 less than if she had not contributed. Its social-fiscal measures will be increased by $1,137 (Canadian Family Allowance, Quebec Family Allowance, GST loan, Canadian Education Bond, Canadian Education Savings Grant, and Quebec Education Savings Incentive).
So the actual cost of his RRSP contribution would be $1,063, or a total real savings of 69.6%.
Also Read: 12 Tax Credits and Deductions to Keep in Mind
Read also: Know all the benefits of your RRSP contributions