In the final year of employment prior to retirement (which is usually the year in which you turn 71) take advantage of the $ 2000 over-contribution rule. You may even wish to go beyond this amount up to 18% of your earned income in the final year of employment as the income you earn in your final year of employment will be used to calculate your contribution room and you will receive a deduction in the following year. This is a sound strategy since your RRSPs will collapse at the end of the year in which you turn 71 and you will no longer be able to contribute to your RRSPs the following year (even though you worked the year before). A 1% penalty per month applies to contributions that exceed the over-contribution limit and therefore you should make this final contribution as late in the year as possible to minimize penalties. Consult your tax advisor prior to making such decisions