With an RRSP, you will save for retirement while saving on your taxes every year in which you make contributions. According to Statistics Canada, for households in higher tax brackets (higher incomes), an RRSP would be more profitable than a TFSA and should be maximized first.
How Registered Retirement Savings Plans help in retirement planning:
RRSPs in Canada are designed to promote retirement saving, especially for entrepreneurs, self-employed people, and those working for companies that don’t offer group pension plans.
What is an RRSP’s tax status? Growth of your savings in your Registered Retirement Savings Plan is tax-free. RRSP contributions are tax-deductible, which could save you thousands of dollars in tax, leaving you with more money to grow your savings faster.
When you retire, the savings you accumulated can be turned into regular retirement income through RRIFs or annuities.
The different types of Registered Retirement Savings Plans:
- Individual RRSPs – only one contributor on the account
- Spousal RRSPs – these bring tax advantages while allowing higher-earning spouses to contribute to their spouse’s RRSPs
- Group RRSPs – these are arranged by an employer and allow employees to make contributions through payroll
- Pooled RRSPs – aimed at small businesses employers/employees and self-employed people
Types of accounts and investments allowed in RRSPs in Canada:
What is an RRSP good for when it comes to growing your money? There is a wide variety of ways you can grow the money held in your RRSP accounts:
- Mutual funds
- Exchange-traded funds
- Savings accounts
- Income trusts
- Guaranteed Investment Certificates
How to boost your RRSP retirement savings:
If you’re worried that your RRSP savings won’t pay for the lifestyle you want, there is an easy way to boost your retirement income. Refinance your mortgage to cash in on some of your home’s equity & invest in RRSP. Secure your future by using your home’s equity today!
Call today Lez Gomez The Best Mortgage Agent @ 416-723-1313 to find out how much tax-free cash you could qualify for to help you live the retirement lifestyle you want.