5 Things to Know About RRSP’s
February 3, 2016 by

Be in the know before the RRSP deadline!

The contribution deadline is coming up (February 29th). We want to make sure you’ve got as much information to help you make the best financial decisions. Here are five facts to know about your RRSP and how it can help you plan for your future:

  1. Your RRSP does not let you avoid taxes. However, it does let you defer them by allowing you to deduct your contributions from your income. You will only have to deal with the income taxes when you withdraw the funds in retirement.
  2. Your unused contribution room will carry forward for the instances that you do not maximize your contribution for a given year.
  3. If you have a pension plan through your employer, your RRSP contribution room can be reduced. The amount you are able to contribute, therefore, may or may not be substantially reduced, depending on your pension plan.
  4. You are able to withdraw money from your RRSP prior to retirement through the home buyer’s plan and the lifelong learning plan. If you do take advantage of these programs you will have to pay back into your RRSP within a set time period, depending on the plan.
  5. If you are choosing whether or not to save for retirement through an RRSP or tax-free savings account, take your current tax bracket into consideration as well as your expectations of where you want to be when you begin withdrawing from an RRSP.

Got questions? Contact us or visit the CRA website for more information.


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