Someday, we all hope to retire and enjoy the remainder of our lives spending time with family, doing hobbies, travelling and more. Ideally, you want to have enough money to carry you through the rest of your years with minimal stress once you stop working for that paycheck.
In some cases, you may have a workplace pension plan to rely on along with the Canada Pension Plan (CPP) and Old Age Security (OAS), but for many people, they find their income becomes very limited. Having a Registered Retirement Savings Plan (RRSP) in place can supplement the income you would be receiving if you continued to work (and then some).
An RRSP is a retirement savings plan that can hold a variety of different investments. You can invest in your choice of mutual funds, segregated funds and Guaranteed Investment Certificates (GIC's). The reason why an RRSP is so attractive is because any growth or income earned is tax-deferred as long as the funds stay in your RRSP. However, when you take money out of your RRSP, you have to pay tax on it. Each year, you can make contributions to your RRSP to help reduce your taxes. There is a limit each year for how much you can contribute so be careful not to exceed that.
As with any financial goal or endeavor, you will benefit from working with a financial planner. If you feel ready to start planning your finances for your retirement, we can help you get the most out of it and prepare you for any tax implications that may be otherwise unforeseen. Book your free consultation today.