RRSP Loan Calculator
An RRSP loan can be an excellent way to jump start your retirement savings. Use this calculator to see how an RRSP loan could help you in your retirement savings plan.
Amount to borrow
The amount you wish to borrow for your RRSP Loan. The calculator has assumed the amount borrowed is the same as the amount you will deduct on your personal income tax return. Please consult your Tax Advisor to determine the amount you could deduct for your personal income tax purposes.
Interest rate
The interest rate for your RRSP loan. All interest is compounded monthly.
Repayment period
The number of years to repay the loan. This is the length of time to repay the loan if you do not use any of your tax refund to pay down the principal balance.
Marginal tax rate
For illustrative purposes, we have assumed the marginal tax rate of 40. If this is not your marginal tax rate, please change it. Please consult your Tax Advisors if you are unclear as to what tax rate to use. The calculator has assumed that the Tax refund is equal to the loan amount multiplied by your marginal tax rate. However, your tax refund may differ depending on other personal income tax factors.
Estimated annual RRSP return
The annual percentage rate you expect to earn on your RRSP. For example, the total return including dividends of the S&P/TSX Composite Index for the 10 year period from December 31, 2013 through December 31, 2023 was 8.6% (source www.spglobal.com). You may wish to use a more conservative rate of return if you are within 10 years of retirement. This calculator compounds all earnings annually.
Years until retirement
Number of years before you expect to retire.
Tax refund to apply to loan balance
This is the percentage of your tax refund that you wish to apply to the principal balance of your loan. This amount will be used to reduce your balance in month four of your loan.