Registered Retirement Savings Plan (RRSP)

Registered Retirement Savings Plan (RRSP)

A registered retirement savings plan (RRSP), or retirement savings plan (RSP), is a type of account in Canada for holding qualified retirement savings and investments.

The central idea is to set up a supplementary source of retirement income besides Canada Pension Plan (CPP) and Old Age Security (OAS).

They must comply with a variety of guidelines stipulated in the Canadian Income Tax Act. Rules determine the maximum contributions, the timing of contributions, the assets allowed, and the eventual conversion to a registered retirement income fund (RRIF), latest at age 71.

Contributions to RRSPs are deductible from total income, reducing income tax payable for the year in which the contributions are claimed. Any income earned in the RRSP is usually exempt from tax as long as the funds remain in the plan; you generally have to pay tax when you receive payments from the plan. Therefore, no income earned in the account is taxed (including interest, dividends, capital gains, foreign exchange gains, mortality credits, etc.).

Interested in setting up a RRSP, Call us at 604-495-9090  or  Send a message for a call back.