Home > Products & Services > Financial Calculators > RRSP Loan

RRSP Loan

An RRSP loan can be an excellent way to take advantage of unused contribution room, generate tax savings and jump-start your retirement savings. Use this calculator to discover how an RRSP loan could help accelerate your retirement savings plan.

This Financial Calculator requires SUN's Java™ Plug-in. If you see this message you will need to download SUN's Java™ Plug-in. This can be done automatically by clicking the yellow bar at the top of your browser and choosing “Install ActiveX Control”.

    You can also get SUN's Java™ Plug-in here: Get the Java™ Plug-in!

    For more information about this Plug-in please visit: SUN's Java™ Plug-in
    For more information these financial calculators please visit: Financial Calculators from KJE Computer Solutions, LLC

Are you really prepared to retire? Take our Retirement Readiness Quiz today for your own personal report card.

Contact your nearest Investors Group Consultant to find out how The PlanTM can help you fulfill your goals for life.

Definitions

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 a 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 average annual rate of return for the TSX has been 11% for the last 20 years. 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.

The strategies represented may involve loans for the purpose of investing. Note that interest on RRSP loans is not tax deductible. Borrowing to invest is a long-term investment strategy and may be more suitable for higher income individuals and may not be appropriate in all circumstances and is not for everyone. Gains from positive fluctuations in the value of investments will be magnified, but losses from negative fluctuations in the value of investments will also be magnified.

Information and interactive calculators are made available to you as illustrative tools for your independent use and are not intended to provide investment advice. We can not and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.