To find out how registered retirement savings plans (RRSPs) are an especially powerful way to save for your retirement, watch:
Did you know the Government of Canada provides financial incentives to help you save for your retirement?
What is an RRSP?
Simply put, a Registered Retirement Savings Plan, or RRSP, is a special type of savings account that helps Canadians save for their retirement.
How does an RRSP work?
Contributions you make to an RRSP are tax-deferred, meaning the money is only taxed when you withdraw it. For most, withdrawing from your RRSP at a later point in life means paying much less tax. Any money put into an RRSP, up to the annual limit, reduces your taxable income for that year. Your annual limit is a percentage of your earned income plus unused room from earlier years.
You can hold a variety of investments in your RRSP, like stocks, bonds, GICs, and mutual funds.
Because income earned inside an RRSP isn't subject to tax until it's withdrawn, RRSPs are a powerful way to save for your retirement.
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