WHAT IS AN RRSP?
THE RRSP – Plan your future ...and benefit today !
What is an RRSP?
An RRSP ( Registered Retirement savings Plan) is a plan in which you register investments in order to save money for your retirement. The plan is registered with the Canada Revenue Agency(CRA).
An RRSP defers income tax. You do not pay taxes on the income that accumulates in the plan, as long as it remains in the plan. However, if you withdraw registered investments from the plan, you generally have to pay taxes on any withdrawals.
An RRSP MUST BE CONVERTED into retirement income before the end of the calendar year in which you turn 71.
WHO CAN CONTRIBUTE TO AN RRSP?
- Taxpayers who have earned income, as defined under the legislation, or income eligible for a transfer to an RRSP.
- You are 18 years of age and a Resident of Canada.
- You can contribute up to December 31 of the year you turn 71.
Your annual notice of assessment shows the maximum contribution that you are allowed to have , for the past tax year.
Be aware that over contributing over a certain amount will trigger tax penalties.
Contact Azure Financial Solutions Inc. team today, to get more info regarding RRSP’s and their advantages.