rrsp | Silver Compass Inc.
Introduced in 1957, the Registered Retirement Savings Plan (RRSP) is an incentive program to entice the Canadian population to save for retirement. In order to get the most from this type of savings vehicle, it is essential to plan future investments and avoid panicking to meet deadlines or taking action without fully understanding the long-term effects.
Tick Tock: RRSP Season is Here!
I am continually amazed at the number of people, who have high incomes and savings, that fail to take full advantage of the preferential tax treatment of RRSPs versus other types of investment or savings accounts. This is especially true for business owners who often have retained earnings in their corporations while also having massive amounts, sometimes $50,000 or more, in unused RRSP contribution room.
Read more about Tick Tock: RRSP Season is Here!
Both TFSAs and RRSPs are excellent savings vehicles for Canadians. The TFSA is a Tax Free Savings Account that has only been around since 2009. TFSAs are often referred to as the "Totally Fantastic Savings account" yet some are not aware of the differences between a TFSA and a regular savings account. By contrast, RRSPs are Registered Retirement Savings Plans which have been around much longer. RRSPs were first introduced in 1957. RRSPs started out slowly given the maximum contribution was $2,500 each year.
Read more about TFSA or RRSP ?
If you are a Canadian with significant assets and savings then maximizing your TFSA makes sense as a retirement income planning strategy. The income from it during your retirement years is non-taxable and will not trigger any Old Age Security clawback which starts at $74,780 in 2017.
Read more about RRSP Vs. TFSA: Which is Better?
Let us discuss a scenario that faces a high number of retirees and soon-to-be-retirees all over the country. You have spent years saving for your retirement and you have made smart decisions about using the power of RRSPs to accumulate a significant nest egg.
But now you’re unsure about how best to get income from your investment portfolio as your retirement day comes ever closer. In terms of your RRSP investments, as a decision must be made before the last day of the year during which the account holder turns 71.
Since their introduction in 1957 as an incentive to save for retirement, Registered Retirement Savings Plans (RRSPs) have evolved into the most popular savings vehicles in Canada. All too often, though, RRSP decisions are made in a panic to meet a deadline, with little or no planning or understanding of the effects of our actions.
Investors who start saving at a young age automatically have one of the most powerful assets on their side: Time. To get ahead financially, young adults should beware of some of the most common pitfalls discussed below that can all too easily sabotage a financial success strategy.
A Registered Retirement Savings Plan (RRSP) is a retirement plan that is registered with the federal government and that you or your spouse or common-law partner can establish and contribute into until the end of the year when the plan holder turns 71.
Deductible RRSP contributions can be used to reduce your tax. Any income you earn in the RRSP is exempt from tax for the time the funds remain in the plan. However, you generally have to pay tax when you cash in or receive payments from the plan.