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RRSPs? What are those?

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 RRSP

  • Allows retirement savings to grow faster



Generate retirement income for stability

  • When you’re ready to retire, you can convert your RSP to a RRIF or annuity to receive regular payments

  • Income from the RRIF will be taxable but in your later ages, you will potentially be in a lower tax bracket and pay less tax


Spousal RSP benefits

  • 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 towards education costs


It is always best to consult a licensed financial advisor when considering whether RRSP's make sense for your financial plan. Depending on your personal situation, contributions to your Tax-Free Savings Account (TFSA), can sometimes be a better option.



Wondering if an RRSP fits into your financial plan? Contact us at info@bogressfinancialgroup.ca for a complimentary financial review.


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