What is an RRSP?
An RRSP is a retirement plan registered with the Canada Revenue Agency (CRA) and to which you or your spouse makes monetary contributions. These contributions, up to your personal limit, are deductible from your income, meaning that they can be used to reduce the total tax you pay in a given Year. As well, any growth in an RRSP is exempt from tax while your money remains inside the plan. These are incentives the CRA uses to help ensure Canadians take an active role in preparing for their retirement.
How an RRSP can help you
- The deduction available on your contributions will lower your tax bill.
- It offers tax-deferred growth on investments in the plan.
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