Updated: Feb 18
In this article, I will talk about the benefits of RRSP?
Who should contribute to RRSP?
The answer is depends on several factors, however, in the following situation you should at least consider investing in RRSP:
-First time home buyers . You can use up to $35,000 per person, that means $70,000 for a couple and you can take advantage of the tax deferral, pay it back interest free in 15 years. In 2020 a new rule for those who get divorced to be considered FTHB after 90 days living separately. Some conditions might apply.
-If you get a matching RRSP from the employer, because it is free money.
-For the high earner, over $100,000 per year is worth looking into it especially if we expect to have less in retirement. Make sure you take advantage of the income splitting option through spousal RRSP, but be careful with the attribution rules.
What are the benefits of RRSP?
There are a few benefits worth mentioning:
-The Home Buyers plan already mentioned here.
-The Life Learning plan for you and your spouse only (cannot be used for child education).
-Tax deferral on investments and also on the growth part of investment.
-After you retire you will need to set-up a RRIF for the decumulation stage and the deferral is still on until you withdraw money from the fund, but some minimum amounts we are required to withdraw every year.
Feel free to contact me if you need help with your RRSP at: