RRSP / RPP over contribution
Hi guys, new member here with a question regarding RRSP/RPP limits.
I maxed out my RRSP contribution for 2015 and recently took a new job that offers a RPP with a 1:1 match of a 4% bi-weekly salary contribution
I have not enrolled in the plan yet, as I have a few more weeks to do so. Since I have already maxed out my limit for the year, that means whatever I add to the account will be over contributing.
I read there is a 2000$ grace amount for over contributing, on which you are not penalized, but on which you also cannot claim a tax deduction.
1- Should I enroll in the plan right away, taking advantage of the 4% match, even though it will take me above the 2000$ grace limit, and I will end up paying penalty on that amount, and having to go through the hassle of filing whatever docs I have to file
2- Should I wait a few weeks before enrolling (effectively ensuring I do not over contribute more than 2000$), taking advantage of the 4% match while paying taxes on the complete amount I over contributed?
3- Should I wait for Jan 1 2016 to enroll, therefore not exceeding my contribution limit, forgoing a 4% employer match on the 6-7 remaining paychecks this year
I'm leaning towards option 2, but I'm not sure whether there are other implications I did not consider, or that I am not aware of...
What would you do?
Thanks guys!
I maxed out my RRSP contribution for 2015 and recently took a new job that offers a RPP with a 1:1 match of a 4% bi-weekly salary contribution
I have not enrolled in the plan yet, as I have a few more weeks to do so. Since I have already maxed out my limit for the year, that means whatever I add to the account will be over contributing.
I read there is a 2000$ grace amount for over contributing, on which you are not penalized, but on which you also cannot claim a tax deduction.
1- Should I enroll in the plan right away, taking advantage of the 4% match, even though it will take me above the 2000$ grace limit, and I will end up paying penalty on that amount, and having to go through the hassle of filing whatever docs I have to file
2- Should I wait a few weeks before enrolling (effectively ensuring I do not over contribute more than 2000$), taking advantage of the 4% match while paying taxes on the complete amount I over contributed?
3- Should I wait for Jan 1 2016 to enroll, therefore not exceeding my contribution limit, forgoing a 4% employer match on the 6-7 remaining paychecks this year
I'm leaning towards option 2, but I'm not sure whether there are other implications I did not consider, or that I am not aware of...
What would you do?
Thanks guys!