Registered Retirement Savings Plan

As the lifespan of people are increasing, the money saved for retirement must last longer. Prudent financial preparation for old age can help you enjoy the benefits of your hard-earned savings.

Government pension assistance offers a very modest base on which to build your retirement income. To preserve your pre-retirement existence, most Canadians will necessitate most of their retirement to come from investments and personal savings and/or an employer pensions.

There is also the OAS Pension or Old Age Security which is an assistance available monthly accessible to those Canadians 65 year old that meet the legal status and Canadian residence requirements. You need to apply to collect these benefits.

RRSP Explanation

Understanding the RRSP

Key Points

Who
Individuals, Families, Business Owners
Contribution Limit
A Registered Retirement Savings Plan or RRSP, will aid you in saving money for your retirement tax-free. The contribution limit each year is 18% of your annual income plus contribution from previous years. Contributions are made until December 31st of the year you turn 71. You may open an Individual plan for yourself or a Spousal Plan. There are also many options in savings such as mutual funds, GICs, or segregated funds.
How to access your RRSP?
The Canadian Government also aids savings in RESPs to grow much more rapidly by offering special savings encouragements such as the Canadian Learning Bond and the Canadian Education Savings Grant. RESP savings of $2,500 every year is entitled to a 20% Canadian Education Savings Grant, up to a max of lifetime $7,200 for each child. An added grant is also accessible for middle and low-income families; a separate submission is needed to be submitted to acquire this grant. Children from low-income families also are eligible for the National Child Benefit Supplement may also collect an innovative Canadian Learning Bond also known as CLB of $500 in their RESP, with added payments of $100 every year until age 15.
Sources of Retirement Income
To aid you in better planning for your retirement, it is important to understand the Retirement Income System of Canada. There are three main sources of retirement income that you may be able to draw from: