As much as I morbidly doubt that I’ll make it to a ripe old retirement age, I still dutifully contribute to my RRSP. This year taking a small loan from my line of credit seemed worth it considering that I would get half of it back in my tax return and could pay off the rest relatively quickly.
To complicate matters, my dad spoke with his brother, an investment advisor, for advice on how I should invest my meagre funds. Being woefully uninformed about investing myself, I appreciate advice from those in the know. But the best course of action was, in part, to switch my RRSP to another bank.
I made an appointment with the other bank, signed up for the new RRSP, and wrote them a cheque for this year’s contribution. I completed and filed my tax return, and was happy to have it done with.
Imagine my shock when I checked my bank account today to find my line of credit nearly maxed out. And then it dawned on me – in all the chaos of last week I had forgotten to cancel the transfer I had previously set up to make a contribution to my old RRSP. Oh NO! Could I reverse it? Would the tax man kick my ass for overcontributing to my RRSP? If I took out the funds would I be penalized? Total horror. Not to mention that I feel like a complete moron for this total financial blunder caused by my absentmindedness.
I called my bank, waited on hold for 20 minutes while being serenaded by some horrendous 80s saxophone muzak, and then begged the rep to help me. “Can you undo the transaction?” The answer was basically, oh, you are switching your RRSP to another bank? Well eff you. Don’t get me wrong, I love my bank, but it was like being caught getting it on with the milkman. Sigh.
After work I called CRA and asked what I should do. Will I be penalized for this? The very reassuring guy on the phone said I had two options to fix the mess, both requiring a ton of paperwork (of course) – apply to get the money back without penalty, or apply to have it count for 2009 tax year.
I’m glad to know that there are options, but I still have to decide what to do. The logical answer is that I can’t afford to keep the extra money in the RRSP so I should get it back. But a year from now I’ll probably be depositing that amount in my RRSP anyway, so why not leave it in there? Maybe if I really bust my ass I could pay it all off…but I just don’t know. I guess I can think about it for a few days, while I peruse the craigslist job ads for dogwalking positions…
