If you are planning to retire, you must be wondering about going for a registered retirement savings plan. It is a type of savings account specially designed for Canadians to save some money for retirement. If you wish to learn more about it, you are on the right page, as Ez Financial has your back.
The best part about the registered retirement savings plan in Canada is that it has several tax advantages that allow your money to grow while you save. First, you need to pay taxes on the withdrawal amount but pay at a much lower rate than what you pay now.
The working of register retirement savings plan
When you choose Ez Financial, our experts will help you understand the working of RRSP. It means any contribution you make to this plan will help you reduce your taxable income currently. In addition, it means you don’t have to pay taxes on the contributions until you withdraw the money.
It means you will pay much less tax in the later point of life while you are in your 60s or 70s. Additionally, you can hold various investments in your RRSPs like bonds, stocks, mutual funds and segregated funds.
The registered retirement savings plan is registered in your name, and only you can contribute to it. Besides any unused surplus from the previous years, you can contribute around 18% of your income. You also need to know that only you can make the withdrawals.
The contribution limit to your RRSP is calculated every year and would appear at the notice of assessment. You would receive it from the revenue agency of Canada after filing the taxes. It would be best if you remembered the money, you earned the last year plays a crucial role in calculating how much you can contribute to your RRSP account for the current tax year. The only reason you should consider investing in RRSP is that all your contributions are tax deductibles. It means you can reduce the amount for your taxable income when you choose to invest here.
You can contribute to this account whenever you want. There is no deadline, but the deadline for contributing will affect your tax bill for any given year after 60 days of the end of the tax year. The date is always in March.
You can withdraw from the RRSP account whenever you want, but you need to pay taxes whenever you withdraw some funds. The tax amount depends on how much money you withdraw besides your income bracket. For instance, you start withdrawing your money when you are 65, and at that point, you may be in a lower tax bracket.
How can you benefit from the RRSP plan?
When you retire, you can use the money from these funds for several expenses like your medical or health-related expenses, prescription drugs, health insurance etc. you can also use the money for your travel and vacation plans and also take up some hobbies that you always wanted to take up while you were young.
Retirement is one of the best times to focus on yourself and enjoy some years for your leisure activities. But all of these comments with a price tag, but you don’t need to stress as a registered retirement savings plan can help you cover all the expenses of retirement.
How can Ez Financial help you?
We are expert insurance and investment advisors having more than 13 years of experience. So when you choose us, you get only the best services.
We are a team of professionals committed to preserving your wealth and well-being. We are different from the typical banks and insurance companies as we do not have any shelf products to sell or shackle you. Instead, we help you make intelligent financial decisions to improve your life, family work and future.
We ensure that we align with your schedule and a loyal to you till the end of time.
Why choose us?
- No hidden costs
- Professional team
- You are our priority
- We help you choose the best financial securities.
What investments can you keep in your RRSP account?
There are several investments that you can keep in your registered retirement savings plan account. Our experts explain that money is a legal tender in Canada, and foreign currencies are also qualified to become investments, but they are subjected to some limitations. Earlier, the law did not allow foreign currencies as cash balances in the account. The rules have changed now, so you can consider connecting with our professionals before making any investment.
If you are ready to start investing and saving, our experts are prepared to help you open your RRSP. They can also help you make better financial decisions to make the of your savings. In addition, you can connect with our advisor and learn how the RRSP fits your financial goal.
