Canada’s largest association of professional financial advisors strongly supports the federal government’s reported plan to raise the limit for RRSP contributions in the upcoming federal budget.

The National Post today quotes government sources as saying RRSP limits may hit $21,000, an increase of $7,500 from the current limit.

“Advocis has been calling for higher RRSP and RPP contribution limits for years,” said Steve Howard, president and CEO of Advocis. “We’re hoping the report is accurate and that the government will move forward with the idea. It’s certainly a step in the right direction.”

In their 2003 pre-budget submission, the Association and the Conference for Advanced Life Underwriting recommended that RRSP limits, which have remained frozen since 1996, be increased to $27,000 over time and that the defined benefit limit for employee pension plans increase to $3,000. The move would allow Canada’s retirement income system to compete with those of the United States and the United Kingdom.

“Individual Canadians and Canada as a whole would both benefit from higher contribution limits,” said Howard. “People would be able to save more for their retirement, giving them greater financial security in their senior years.”