RRSP

An RRSP should be one of the cornerstones of your retirement planning. The objective of the federal Government's RRSP legislation is to help Canadians live comfortably, allowing them to supplement their incomes using savings that have accumulated in a tax-sheltered plan prior to retirement. Every Candian Tax filer age 69 and younger, with qualifying earned income may establish an RRSP.

How Does an RRSP Work - The basic workings of an RRSP are easy to understand:

• Contributions to your RRSP are made annually to certain allowable limits;
• Contributions are tax deductible and provide you with savings on current year taxes;
• Income earned on funds in your RRSP grows on a tax-sheltered basis until withdrawn;
• You may withdraw funds at anytime from your RRSP, but if you do, the entire amount withdrawn becomes taxable in that year;
• Most people choose to leave the funds in their RRSP until they retire;
• As long as you have qualifying "earned income", you may contribute to an RRSP up until the end of the year in which you reach your 69th birthday. After that you must choose a retirement income option, and start to recieve payments.

Since their introductions in 1957, Registered Retirement Savings Plans (RRSPs) have become the most important, long-term savings vehicle in Canada. Over 40% of the working population own an RRSP. This widespread popularity is easily understood when you consider that:

• Contributions to your RRSP immediately reduce your taxable income in the current year;
• Saving in an RRSP assists you in preparing for the best lifestyle possible in your retirement years;
• Income earned in an RRSP is tax-sheltered.

Saving in an RRSP is one of the shrewdest ways of making your money grow, and ensuring the you will have the maximum amount of capital upon retirement.

**Information is subject to change by Government Legislation.