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Discussion Starter #1
Do RRSP contributions count to lower one's net income to be low low enough to receive these?

I am saving big into my RRSP this year, which will result in big reduction in net income. Wondering if I can count on this for next year.
 

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Pretty sure they do. The GST credit is based on Net Income. Net income is Gross income - deductions ( includes RRSP amounts) .
 

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I think so as well. I remember getting the credit after a few years of not getting it, when I began contributing to my RRSP. I believe the same is true of the CCB.
 

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Do RRSP contributions count to lower one's net income to be low low enough to receive these?

I am saving big into my RRSP this year, which will result in big reduction in net income. Wondering if I can count on this for next year.
In terms of net income being "low enough," it depends on your starting point.
The 2018 income thresholds for qualifying for the GST/HST rebate are here.

One more thing to consider: Depending on your income, you may not wish to deduct all your RRSP contributions in one year. It may be more beneficial, especially if your income is approaching six figures, to spread out the deduction using your marginal tax rate as a guide. For example, make deductions to reduce your income to next bracket, then do the same again next year. The marginal tax savings could be greater than the GST rebate.

Marginal tax rates
 

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Yes, you need to think of it in terms of most money in your pocket. That includes marginal tax rates, GST rebates, child care benefits (which can be an even bigger number than the first two if you have kids), and other things like charitable deductions, child care costs, medical expenses, etc.
 

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Discussion Starter #6 (Edited)
Thanks for the replies, glad the consensus is this will make me eligible for GST Credit.

And I agree with you guys that thinking about marginal tax rates is a valid consideration when saving to RRSP. Maybe you can refine my thinking here:

My yearly spending is quite low (while still having a very comfortable, active lifestyle). I save about 55% of my net income, and am currently putting it all in my RRSP - hence why net income goes down so much. I do have a somewhat-large contribution limit, so I would be eating into that far more quickly - rapidly depleting it. That said, the intent is to become F.I. asap. As I see it, if I save within a lower marginal tax rate now, yes, I get less of a return than if I'd saved at a higher income later. But, I will be earning interest on that lower return for more years. In my mind, this earned interest would offset that loss (loss = rebate later from a larger tax bracket vs. rebate now from a lower tax bracket). I plan on thinking way more about this and creating an excel optimizer, so if you have ideas/ suggestions, or just spot something I'm not considering, I would appreciate you calling it out so I can better incorporate into my model.
 

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I say build a spreadsheet with actual numbers. Math with exponentials often leads to conclusions which are not obvious at first glance. And the details probably matter. For example, if you have mostly capital gains, you already have deferred taxes and will pay taxes on only 50% (subject to change in the future of course) of the gains. I suspect that could beat the RRSP if you're not getting a lower marginal rate on withdrawal from using it.

Someone will probably come along with a link to where this has already been discussed. I'm fairly certain it has been but I can't remember where.
 

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While others have said it will, I would say it might, because it all depends how much it lowers your net income.

Also, are you sure you have enough contribution room for 55% of your net income? Seems a pretty high percentage, unless you haven't been doing any contributions for several years.
 

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Discussion Starter #9
Joe, totally this. It took me a while to sort out my finances, but I'm here now. The good news is that now I have a significant amount of contribution room to fill up.
 
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