Registered Retirement Savings Plan

Registered Retirement Savings Plan

A Registered Retirement Savings Plan is an investment account designed to save for your retirement. Similar to a TFSA you can hold various investments including stocks and Exchange Traded Funds (ETFs). Contributions grow tax deferred until you withdraw from the account. Contributions are capped at the lesser amount of 18% of your previous year's claimed income, subject to the limit set by CRA which for 2022 is $29,210. RRSPs must be converted into a Registered Retirement Income Fund by age 71. The main benefit is contributions to a RRSP are tax deductible against your income. You may choose when to deduct your contributions against your income. You do not have to deduct your contributions against your income in the same year. For example, it is more beneficial to contribute when you are in a lower tax bracket and deduct when you are in a higher bracket.

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