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RRSP Contribution After Age 71?

Reader Question: Can I Make A RRSP Contribution After Age 71?

My husband turned 71 this year (2009). He has done his RRSP for 2009 and all investments are now RIF’d. Have been advised by banker that he could take an additional RRSP now and carry forward to his 2010 tax year. Apparently a penalty of 1% would be charged by Revenue Canada.  Is this correct and is this a good idea.  Thanks.

You can contribute to a RRSP until the end of the year you turn age 71. If you will have earned income after age 71, you can make an RRSP contribution that is more than $2,000 above the contribution limit then the penalty tax applies for 1 month (December). In January the overcontribution will be offset by your new RRSP contribution room.