Registered Retirement Savings Plan (RRSP)
Registered Retirement Savings Plans (RRSPs) are accounts specifically designed to help Canadians invest for retirement:
With an RRSP, you won’t pay tax on any growth on investments while it’s in your account. That’s a big deal, because it can help you achieve your goals faster. Plus, any money you put in your RRSP will be subtracted from your income so you’ll pay less in taxes.
- Start planning earlyThe secret to RRSP growth is to take advantage of it as soon as possible. The earlier you start contributing to your RRSP with a Continuous Savings Plan, the more time your money has to grow tax-free.
- Max out contributionsWe know that life happens and it’s not always easy to put a ton away for retirement. But making small, regular contributions can help you get closer to hitting that limit each year.
- Make up for missed contributionsIf you fell short of your maximum contribution, it’s not too late. The room you have left will roll over into next year, so you have another shot at saving as much as you can.
What are contribution limits on RRSPs?
The 2017 limit is 18 percent of your income from the year before or $26,010 (whichever is smaller). If you don’t hit the maximum contribution this year, you can roll over the remaining amount into the next year.
What happens when I withdraw from my RRSP?
You’ll have to pay tax on the money you withdraw from your RRSP. The exception is if you’re using the funds to buy your first house or go back to school. But you’ll still need to put that money back in your RRSP eventually.
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