Registered Retirement Savings Plan (RRSP)
A Registered Retirement Savings Plan (RRSP) is a plan that is registered with the Federal Government, in which an individual or spouse/common law partner can contribute until the year the plan holder turns 71.
Registered Retirement Savings Plans (RRSPs) have tax advantages that include:
- Non-taxable earnings – Any interest you accrue is not taxable, providing it stays in the RRSP.
- Deferred tax – When you withdraw your RRSP funds, you will pay taxes on both your contributions and the earnings of the investment. However, since it’s likely that your tax rate will be lower in retirement than in your contributing years, you may pay less tax.
An RRSP is the “umbrella” under which your investments are shielded from tax. Within the RRSP, Cal LeGrow offers a variety of investment options including:
- Investment Funds
- Canada Savings Bonds
RRSPs can be established on an individual or group basis.
If your employer offers a group RRSP, contributions are generally taken as payroll deductions from an employee’s pre-tax pay.
Whether you have an individual or group RRSP, there are a number of withdrawal options available to you, including:
- Conversion into a Registered Retirement Income Fund (RRIF)
- Buying or building a home
- Financing education
Talk to a Cal LeGrow financial advisor today to see if RRSPs can help you reach your goals.