RRSP: Smart Savings for a Secure Retirement
What is an RRSP?
A Registered Retirement Savings Plan (RRSP) is a powerful tool to save for retirement while lowering your taxable income. Designed for long-term financial growth, an RRSP helps you build wealth while taking advantage of tax benefits.
Key Benefits of an RRSP
* Tax Savings Now, Income for the Future
Contribute up to 18% of your previous year’s earned income (up to a set limit).
Reduce your taxable income—this could mean a tax refund.
Withdrawals in retirement are taxed at a lower rate when your income is lower.
* Flexible Retirement Planning
Convert to a Registered Retirement Income Fund (RRIF) by age 71 to start receiving income.
Withdraw anytime if needed (but withdrawals are taxed).
Start early or delay withdrawals depending on your financial goals.
* First-Time Home Buyers: Use RRSPs to Buy a Home
Access up to $35,000 tax-free through the Home Buyers’ Plan (HBP).
Repay over 15 years, giving you time to replenish your savings.
Great option for first-time homebuyers looking to boost their down payment.
How It Works ? Maximize Your RRSP
Step 1: Contribute – Save up to 18% of last year’s income (or use past unused room).
Step 2: Get Tax Savings – Reduce taxable income = potential tax refund.
Step 3: Grow Investments – Funds grow tax-free inside your RRSP.
Step 4: Withdraw in Retirement – Convert to an RRIF at 71 and receive income at a lower tax rate.