The RRSP is a registered saving account which allows you to accumulate tax free savings for your retirement while reducing your taxable income. It is used for:
- saving for retirement;
- buy or build our first residence;
- financing our studies.
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- You can grow the savings you put aside during your working life tax-free to supplement your sources of income during retirement.
- At death, the plan can be transferred to your spouse with no tax consequences.
- You can use this saving account to help buy a home (HBP).
- You can also use it to go back to school (LLP).
- You must transfer your RRSP into an RRIF (registered retirement income fund) no later than December 31 of the year you turn 71.
- BONUSDOLLARS can be redeemed to contribute to an RRSP
- Anyone under 71 with income earned in Canada can contribute to a registered retirment saving plan, no matter where they live.
- The annual contribution limit is 18% of income earned in the previous year.
- The maximum contribution for 2015 is $24,930 and for 2016 is $25,370.
- Contributing to your employer’s retirement plan reduces the amount you can invest in your RRSP.
- You can contribute to your own or your legal or common law spouse’s RRSP.
- If you don’t use all of your contribution room one year, you can carry the unused portion over to the following years.
- See the “RRSP Deduction Limit Statement” section of the notice of assessment Canada Revenue Agencysends you each year.
- You can make a maximum excess contribution of $2,000.
- You may contribute to your saving plan until December 31 of the year you turn 71.