One of your friends, a very wealthy businessman, has indicated that he never makes contributions to his RRSP in excess of amounts that he can deduct. His reasoning is that this doesn't make sense because, even though the contributions cannot be deducted when they are made, they will be subject to tax when they are withdrawn. Do you agree with your friend? Explain your conclusion, indicating any assumptions that you have made.

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The Answer of One of your friends, a very wealthy businessman, has indicated that he never makes contributions to his RRSP in excess of amounts that he can deduct. His reasoning is that this doesn't make sense because, even though the contributions cannot be deducted when they are made, they will be subject to tax when they are withdrawn. Do you agree with your friend? Explain your conclusion, indicating any assumptions that you have made.

One of Your Friends, a Very Wealthy Businessman, Has Indicated