Do these 2 topics make you uncomfortable? If the answer is yes, do you typically procrastinate?

Why do the alarm bells go off in February? If all the media attention hasn’t brought it to your attention, the following might:

• You will receive most of your income tax slips in February
• The deadline to contribute to your Retirement Savings Plan (RSP) for deduction on 2012 income tax is the end of February

Retirement can seem so far away yet filing personal income taxes is one of those annual chores. They are related in 2 ways:

• RSP contributions made by the deadline can reduce your tax bill for 2012
• Income tax preparation is a good opportunity to review your financial situation now and plan for your future

RSP’s are one of few ways to prepare for your retirement. A government sanctioned program that has several benefits if you operate within the conditions. The benefits include:

• Deductions that can minimize your current income tax bill
• Tax sheltered earning
• Tax deferral (income tax payment rate applicable to your income level at withdrawal)
• Savings for you!

The point is, February almost over! If you think you may have a tax bill in your near future and have some funds to save in an RSP it can be worth doing a quick calculation now to learn how much to put aside to reduce income tax owing. The money stays in your pocket as opposed to going to the government.