Retirement Planning

2021 Financial planning guide: The numbers you need to know

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A new year means new limits and data. Here’s a list of new financial planning data for 2021 (In case you want to compare this to past years, I’ve included old data as well).

Pension and RRSP contribution limits

  • The new limit for RRSPs for 2021 is 18% of the previous year’s earned income or $27,830 whichever is lower less the Pension Adjustment (PA).
  • The limit for Deferred Profit Sharing Plans is $14,605
  • The limit for Defined Contribution Pensions is $29,210

Remember that contributions made in January and February of 2021 can be used as a tax deduction for the 2020 tax year.

Tax Year Income from RRSP Maximum Limit
2021 2020 $27,830
2020 2019 $27,230
2019 2018 $26,500
2018 2017 $26,230
2017 2016 $26,010
2016 2015 $25,370
2015 2014 $24,930
2014 2013 $24,270
2013 2012 $23,820
2012 2011 $22,970
2011 2010 $22,450
2010 2009 $22,000
2009 2008 $21,000

More articles on RRSPs

TFSA limits

  • The annual TFSA limit for 2021 is the same at $6,000.
  • The cumulative limit since 2009 is $75,500 (assuming you were over the age of 18 in 2009)

TFSA Limits for past years

Year Annual Limit Cumulative Limit
2021 $6000 $75,500
2020 $6,000 $69,500
2019 $6,000 $63,500
2018 $5,500 $57,500
2017 $5,500 $52,000
2016 $5,500 $46,500
2015 $10,000 $41,000
2014 $5,500 $31,000
2013 $5,500 $25,500
2012 $5,000 $20,000
2011 $5,000 $15,000
2010 $5,000 $10,000
2009 $5,000 $5,000

More articles on the TFSA

Canada Pension Plan (CPP)

Here’s some of the key planning data around CPP.

  • Contribution amounts for 2021
    • Employee contribution = 5.45% (up from 5.25% in 2020)
    • Employer contribution = 5.45% (up from 5.25% in 2020)
    • Self employment = 10.9% (up from 10.5% in 2020)
    • The maximum employer and employee contribution to the plan for 2021 will be $3,166.45 each and the maximum self-employed contribution will be $6,332.90. The maximums in 2020 were $2,898.00 and $5,796.00.
    •  
  • CPP Benefits
    • Yearly Maximum Pensionable Earning (YMPE) – $61,600
    • Maximum CPP Retirement Benefit – $1203.75 per month
    • Maximum CPP Disability benefit – $1413.66 per month
    • Maximum CPP Survivors Benefit
      • Under age 65 – $650.72
      • Over age 65 – $722.25

Reduction of CPP for early benefit – 0.6% for every month prior to age 65. At age 60, the reduction is 36%.

CPP rates for past years:

Year Monthly Annual
2021 $1203.75 $14,445.00
2020 $1175.83 $14,109.96
2019 $1154.58 $13,854.96
2018 $1134.17 $13,610.04
2017 $1114.17 $13,370.04
2016 $1092.50 $13,110.00
2015 $1065.00 $12,780.00
2014 $1038.33 $12,459.96
2013 $1012.50 $12,150.00
2012 $986.67 $11,840.04
2011 $960.00 $11,520.00
2010 $934.17 $11,210.04
2009 $908.75 $10,905.00

For more information on CPP

Old Age Security (OAS)

  • Maximum OAS – $615.37 per month
  • The OAS Clawback (recovery) starts at $79,845 of income. At $129,075 of income OAS will be fully clawed back.

OAS rates for past years:

Year Maximum Monthly Benefit Maximum Annual Benefit
2021 $615.37 $7,384.44
2020 $613.53 $7,362.36
2019 $601.45 $7,217.40
2018 $586.66 $7,039.92
2017 $578.53 $6,942.36
2016 $570.52 $6,846.24
2015 $563.74 $6,764.88
2014 $551.54 $6,618.48
2013 $546.07 $6,552.84
2012 $540.12 $6,481.44
2011 $524.23 $6,290.76

For more information on OAS Clawback:

New federal tax brackets

For 2021, the tax rates have changed.

Lower Income limit Upper Income limit Marginal Rate Rate
$0.00 $13,808.00 0.00%
$13,808.00 $49,020.00 15.00%
$49,020.00 $98,040.00 20.50%
$98,040.00 $151,978.00 26.00%
$151,978.00 $216,511.00 29.00%
$216,511.00 33.00%

Remember these rates do not include provincial tax. For new provincial rates, visit the CRA site.

For more information on tax rates

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