Blog N&W Financial
RRSP
The Registered Retirement Savings Plan (RRSP), is a personal savings plan that lets you save money over your lifetime on a tax-sheltered basis, so your money grows faster.
Who should invest in a RRSP?
- Canadians under 71 years of age who earns employment income and wants to save for retirement by reducing their tax bill
- Great for long-term retirement goals and generating ongoing income in your later years
- Best suited for medium to high income earners
Reasons why you should invest in an RRSP:
Tax-deductible contributions
- Claim your RSP contributions as a deduction on your tax return
- Can carry forward deduction from contribution to future years when income might be higher
Tax-free growth
- Won’t have to pay any taxes on investment gains as long as it remains in the RSP
- Allows retirement savings to grow faster
Generate retirement income for stability
- Split income in the household by contributing into spousal RSP
- Retirement income can be split more equally between you and your spouse, generating a reduced amount of tax that higher income earner pays
Government withdrawal benefits:
Make withdrawals without paying any tax if you pay the money back within the specified time periods for:
- Home Buyers Plan – withdraw from your RSP to contribute towards your first home purchase
- Lifelong Learning Plan – withdraw from your RSP to contribute
