What is the maximum contribution Harry can make to his RRSP without incurring a penalty, given his circumstances?

The maximum contribution that an individual can make to a Registered Retirement Savings Plan (RRSP) without incurring a penalty is determined by specific factors, including the individual's earned income and any unused contribution room from previous years. The limit for RRSP contributions is typically based on 18% of the prior year's earned income, up to a specified maximum set by the government.

If Harry’s contribution limit is indicated as $54,200, this suggests he may have either a substantial amount of earned income or has accumulated significant unused contribution room from earlier years. The annual maximum contribution limit is adjusted each year to account for inflation, which is why the figure can vary.

In this case, the $54,200 amount implies that Harry's situation fits within the guidelines that determine this threshold, setting him well within a level where contributions can be made without facing overcontribution penalties. It showcases the importance of keeping track of both current earnings and past contributions to effectively manage RRSP limits.