A Registered Retirement Savings Plan (RRSP) is designed to help Canadians save for retirement.
How It Works
When you contribute to an RRSP:
- You receive a tax deduction
- Investments grow tax-deferred
- You pay tax when withdrawing in retirement
Who Benefits Most?
RRSPs are especially useful if:
- You are in a higher tax bracket now
- You expect lower income in retirement
Contribution Limits
Contribution room is based on:
- 18% of your earned income
- Up to an annual maximum
Unused room carries forward.
RRSP vs TFSA
RRSP:
- Tax deduction now
- Taxed later
TFSA:
- No deduction now
- No tax later
Both can play a role in financial planning.
Disclaimer: This article is for informational purposes only.