Do you keep an overcontribution in your (maxed out) RRSP?

[EugW]

As you probably know, CRA allows us a maximum of $2000 overcontribution in our RRSPs. This $2000 is of course not tax deductible, but at least it allows tax-free compounding/growth. However, now that we have the TFSA, it doesn't seem like as good an idea anymore, although it might still be an option if you can easily max out the TFSA every year too (and you don't have a mortgage).

Now that the TFSA exists, do any of you still keep overcontributions in your RRSP? Even though I'm a long way from retirement, I'm considering letting my RRSP overcontribution go to zero, through deductions in the coming year(s).

P.S. Even if you do keep an overcontribution in your RRSP, obviously you should make sure that goes to zero before you start to make any withdrawls from the RRSP. There's not much point in overcontributing $2000 if you're only going to withdraw it next year, while it's still considered an overcontribution. You're essentially taxed twice on the amount.

What say you?

[gavbo]

you should definetly max out your TFSA before overcontributing to your RRSP

if you really wanted to and have the cash you can put the extra $2,000 in the RRSP to get the tax-free compounding but if you plan on taking out the money you shouldn't do it. as soon as you take any money out of the RRSP it gets taxed, and since that $2K that was overcontributed you didn't get any deductions in the first place you would be taxed on that $2K without the benefit of a deduction

[EugW]

you should definetly max out your TFSA before overcontributing to your RRSP
Yes I will be. I'm just wondering if how many here do both.

if you really wanted to and have the cash you can put the extra $2,000 in the RRSP to get the tax-free compounding but if you plan on taking out the money you shouldn't do it. as soon as you take any money out of the RRSP it gets taxed, and since that $2K that was overcontributed you didn't get any deductions in the first place you would be taxed on that $2K without the benefit of a deduction
My RRSP is never touched, and my retirement is a very long time off.