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RRSP

Registered Retirement Savings Plan (RRSP): Save More, Pay Less Tax

The Registered Retirement Savings Plan (RRSP) is a powerful tool for Canadians to save for retirement, purchase a first home, or fund education, all while reducing your annual tax bill. It’s a popular choice, with over 60% of Canadians taking advantage of this plan.

Tax Reduction:
When you contribute to your RRSP, the amount you invest reduces your taxable income for the year. This lowers the taxes you owe, helping you keep more of your earnings.

Tax-Deferred Growth:
Your RRSP investments grow tax-free until you withdraw them, allowing your money to compound over time and potentially provide greater returns in the long run.

Use for Retirement and More:
While RRSPs are primarily designed to fund retirement, they also offer flexibility for other life goals. You can withdraw funds to purchase your first home (using the Home Buyers’ Plan) or to finance your education (via the Lifelong Learning Plan) under certain conditions.

How It Works:

Start with a Solid Plan:
Work with one of our advisors to create an investment strategy tailored to your goals. We’ll help you consider your investment timeline, contribution amounts, and risk tolerance to build the best approach for your needs.
Contribute Annually:
Each year, you can contribute up to 18% of your taxable income (or a set maximum amount, such as $31,560 for 2024). These contributions reduce your taxable income. If you don’t reach your contribution limit, you can carry over any unused space to future years.
Watch Your Funds Grow:
Your investments grow without being taxed, and you benefit from the power of compound interest, which can significantly increase your returns over time.
Access Your Funds:
When you retire or before you turn 71, you can convert your RRSP into a Registered Retirement Income Fund (RRIF) or annuity to begin withdrawals. Additionally, you can withdraw up to $35,000 before retirement to buy your first home or fund your education, with the right conditions in place.