According to Statistics Canada, 35 per cent of Canadians contribute each year to an RRSP.
A Registered Retirement Savings Plan (RRSP) is a tax-deferred account typically used for retirement savings. Any resident of Canada age 71 or under can participate in a RRSP.
The Benefits of an RRSP are as follows:
- The RRSP contribution limit is determined by taking the lesser of 18% of the individual’s previous year’s earned income and the current year’s RRSP dollar limit subject to a maximum contribution limit. Money contributed to a company pension plan and unused contribution from previous years adjust an individual’s contribution room. Contributions may be tax-deductible and the investments grow tax-deferred until removed.
- Contributions to an RRSP can be tailored to fit the individual tax payer’s budget such as weekly, bi-weekly, monthly or yearly.
- RRSPs must be converted to Registered Retirement Income Funds (RRIFs) by the end of the year you turn 71; Foxgrove Benefit Consulting can assist you in consolidating all your RRSP holdings into one account. This simplifies the ease of planning before and during retirement.
There are a range of RRSPs that can fit an individual’s pre retirement needs, such as:
- Individual RRSP
- Spousal RRSP
- Group RRSP
- Self Directed Plans