Registered Retirement Savings Plan
A Registered Retirement Savings Plan (abbreviated to an RRSP) is a savings account which offers you a simple way to put money away for your retirement.
Great Benefits of Opening an RRSP
A key feature of an RRSP is the fact that it is registered with the federal government. Here, we will explore five notable reasons to save for your retirement in this way.
- Your investment is tax-free. This is a great feature of an RRSP. Providing that you keep your investment earnings in the plan, you won’t pay any tax on them. This, of course, means that your savings have the potential to grow at a faster rate
- Your contributions are tax-deductible
Calculate the tax savings that your RRSP contribution generates in each province and territory with this RRSP Savings Calculator.
You are able to show the contribution that you make towards your RRSP as a deduction on your annual tax return, which can add up to considerable savings for those in the top tax bracket. What’s more, you can carry forward this allowance in future years, if your income in one year is lower than usual.
You can transfer your RRSP when you retire. This means that you can easily move the funds invested in your RRSP to an annuity or an RRIF at the time of your retirement to receive regular, staggered payments – though you should note that you will have to pay tax on these payments on an annual basis.
You can withdraw from your RRSP under certain conditions You won’t pay tax on withdrawals from your RRSP in particular circumstances. For instance, you are permitted to withdraw for a down payment on your first home, or to pay for education costs (funding rules apply).
Contact us to learn how we can help you with your retirement plan.
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