With RRSP season among us, many new investors may be wondering what exactly an RRSP is, what benefits this account type has and if it's right for you.
Fidelity discusses the various features of an RRSP, its main pros and cons, and if it's the right move for you.
It’s never too soon to start thinking about your future. So how can you start building up savings for future retirement income? An RRSP may be the answer. Here’s an overview on this type of investment account to help you get started.
What is an RRSP? A Registered Retirement Savings Plan (RRSP) is a type of investment account that allows you to reduce the tax payable on your current income when you save it for the future. How does an RRSP work? An RRSP can be opened by anyone under the age of 71 who has earned and reported income in a previous tax year. An RRSP can help you get a head start on reaching your retirement income goals. The money you invest in an RRSP is tax-deducible, and you defer tax on your investment income until it’s withdrawn. Withdrawals are taxed as ordinary income in the year withdrawn, except for withdrawals for the Home Buyers Plan (HBP) and Life Long Learners Plan (LLP). Like Tax-Free Savings Accounts (TFSAs), RRSPs can hold a wide range of investment options, including mutual funds, exchange-traded funds, stocks and bonds. There are also different types of plans you can set up, like a spousal or common-law partner RRSP, that may offer varying benefits.
If you want to learn more or are ready to make the move to start planning for your retirement- contact us today!
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