Looking for Registered Retirement Savings Plan in BC and Alberta?

The Registered Retirement Savings Plan (RRSP) is a superhero of retirement planning for working Canadians. The pre-tax money is placed into an RRSP, which grows tax-free until withdrawal. Improve your future retirement through RRSP, a golden opportunity to save for your retirement while deferring the income tax for those savings.

RRSP contributions are based on your earned income for the previous year. Generally earned income is the income you get from your employer, business or rental income from your real property as well as any alimony or taxable maintenance. To open an RRSP account you have to be a Canadian resident for tax purposes.

What is the age limit for contributing to RRSP:

There is no minimum age to start an RRSP as long as you have some earned income. And you can contribute to your RRSP until December 31st of the year you turn 71 years old. By the age of 71, you'll need to shut down your RRSP and begin withdrawing the money in it. You can open a Registered Retirement Income Fund (RRIF). You can also to a spousal RRSP until the end of the year your spouse or common law partner tunes 71.

What is an RRSP contribution limit?

RRSP contribution limit is the amount of money that an individual is allowed to save in the RRSP for a given year. CRA has announced the maximum for 2021 to be at $27830. But everyone could have a different contribution room due to carry forward from previous years. So your contribution limit will be based on 18% of your earned income (upto maximum of $27830) plus the carry forward from previous years. This limit is reduced by pension adjustment and pooled RPP contributions.

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Benefits of RRSP

Tax-Deductible Contributions

Immediate tax advantage by deducting contributions from your income and that reduces your taxable income.

Savings Grow Tax-Free

As long as you stay in the RRSP plan, you won't pay any tax on investment earnings, allowing your savings to grow faster.

Tax Deferral

Taxes are deferred till you take the money out of RRSP. The amount of tax you pay depends on your income tax bracket say, if you're in a lower tax bracket, you may pay only a small amount or no tax on your withdrawal.

Home buyers plan (HBP):

CRA allows you to withdraw upto $25,000 from your RRSP tax free to help with the down payment on your first home. You have to pay back the money into RRSP in 15 years starting in second year.

Life Long Leaning Plan (LLP):

If you qualify, you are allowed to borrow upto $10,000 per year upto a combined total of $20,000 tax free to help finance full time education for you or your spouse. You can spread the withdrawals upto 4 years but cannot exceed the maximum $ 20,000. You do have to pay back the loan starting in the fifth year after the first LLP draw. You can take 10 years to payback the LLP loan.

Why Choose Us?

We can help you safeguard your savings from the market jitters based on your risk tolerance. At LifeSmart Insurance, the knowledgeable consultants can provide you with excellent investment services.

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