We should all be thinking about our future. Planning ahead means investing in an RRSP to help reduce our taxes.
What is an RRSP?
The Registered Retirement Saving Plan is a retirement account that was set up by the Canadian government in 1957 to help Canadians save for retirement.
How Does an RRSP Work?
Basically, the account is a tax-deferred program. This allows Canadians to defer paying taxes to the CRA on deposits made. RRSPs are a great strategy to reduces your taxes now while saving for the future.
How to Withdraw from your RRSP Without Paying Tax
Prematurely withdrawing from your registered account before retirement will trigger a penalty. However, there are some exceptions to this rule including the Home Buyer’s Plan (HPB) and The Lifelong Learning Plan (LLP).
What is the RRSP Deduction Limit?
The Registered Retirement Savings Plan deduction limit is the maximum sum that Canada allows us (taxpayers) to deduct from our income when calculating tax liability. This maximum is set each year by the CRA and can be found on your T1028.
RRSP Calculators
Are you contributing enough to your nest egg? Retirement calculators can help you see how changing what you put in your registered account can affect your retirement income.
RRSP Contribution Deadline
The deadline for a contribution is always 60 days after the end of the previous year to be eligible for a deduction. Always check with your financial institutions about how they are able to accommodate deadlines.