What is RRSP ?
RRSP is stands for Registered Retirement Savings Plan. It is the Great tools for savings for your Retirement and It will save you income tax each year if you contribute regularly according to 18% of income earned the previous tax year or a fixed ceiling if your income is high.
This savings account is available to individuals aged 18 and older in Canada and can be used for any purpose.
You should consider an RRSP if:
- RRSP fund money you can use as a Down Payment for 1 st Time Home Buyer Programme (HBP).
- You can carried forward the Unused RRSP contributions for next year.
- Contribution you made to buy RRSP, it will have deducted from your Taxable income which will reduced your Tax and you will get some tax refund as per the Canada revenue agency Tax-Rules slabs.
- It is not taxable income unless or until you withdraw it.
- When you decide to retirement or, at the latest, the year you turn 71 years of age, you must convert your RRSP to a Registered Retirement Income Fund (RRIF)