RRSP “registered retirement savings plan” can help you save more for your golden years. You can contribute as much as 18% of your annual income up to a maximum of $26,500 for the 2019 year.
RRSPs have two main advantages:
. The first, is that RRSP are a tax deferral plan, it reduces your taxable income until you withdraw it in. So, if you’re in a high tax bracket, investing an in RRSP could help push you into a lower one.
. The second, is that any money invested in the account can grow tax-free free until it’s withdrawn.
The RRSP has some other uses, too, like the Home Buyers’ Plan, which allows people to remove $35,000 from their account to pay for a first home without having to pay a penalty, as long as the borrowed funds are re-invested within 15 years.