What are the benefits of contributing to a Registered Retirement Savings Plan (RRSP)?
A significant amount of money that you would otherwise send to the CRA in the form of taxes can be saved by contributing to an RRSP.
What is an Registered Retirement Savings Plan (RRSP)
A Registered Retirement Savings Plan, or RRSP, is a particular kind of investment account designed to help Canadians save for retirement. Within this account, it’s possible to hold a number of types of investments, like mutual funds, savings accounts, stocks, bonds, and a few others. Special tax benefits are applied to these investments.
What are the benefits of having an RRSP?
At the end of the tax year, the CRA will issue a refund cheque on your income tax overpayment based on the amount of your income you contribute to your RRSP investments.
When you are retired and no longer making a full income, you can take out the money from your RRSP at a lower tax rate than when you were making a full income.
Buy your first home, or pay for your education by using your RRSP.
You can also withdraw money for certain things, like a down payment on your first home, or to pay education tuition. Some stipulations apply.
See your Certified Financial Planner to find out how to maximize your contributions, utilize the homebuying or education tuition program. Or get in touch to have your particular situation reviewed by a Certified Financial Planner.
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