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What is a Registered Retirement Savings Plan (RRSP)?  

A Registered Retirement Savings Plan (RRSP) is an account that you use to help you save for your retirement. RRSPs help you reduce your taxes while you save, so they encourage you to save more. Anyone who files a tax return can open one. There are no age limits.

Four common questions about RRSPs

 
1. How much can I put into my RRSP?
There are rules about how much you can contribute each year. You can put more money into your RRSP as your job income grows. To find out how much you can contribute this year, look at the statement you got back from the government when you did your income taxes last April.
 
2. How do I reduce my taxes?
When you put money into your RRSP account, you get a receipt proving how much you contributed. You don’t pay income tax on this amount at tax time if it stays in your RRSP. You only pay the tax when you take the money back out of the plan.
 
3. How do I make my savings grow?
You use the money in your RRSP account to buy investments. You can choose from many kinds of investments. The money you make on your investments is not taxed, until you take it out of the plan.
 
4. Can I spend the money in my RRSP before I retire?
The answer is yes, but you will have to pay the tax you owe unless you borrow the money to:
 
•  Buy a first home: You can use up to $20,000 from your RRSP for a down payment on your first home.
•  Pay for education: You can use some of the money in your RRSP to help you or your spouse go back to school. There are rules about how much you can take out each year.
 
If you borrow money from your RRSP for a home or education, you will have to pay it back, but you will have a number of years to do so.
 

Remember: The main reason to get an RRSP is to save for retirement.

For many Canadians, RRSPs will be an important part of their retirement income.

Other Topics:

Chapter 1:
What is a Registered Retirement Savings Plan (RRSP)?
Chapter 2:
What choices do I have when I invest in an RRSP?
Chapter 3:
How do I contribute to an RRSP?
Chapter 4:
What will it cost me to have an RRSP?
Chapter 5:
Is the money in my RRSP safe?
Chapter 6:
How can an RRSP help me at this stage in my life?
How do Registered Retirement Savings Plans (RRSPs) work?

Tax:A fee the government charges on income, property, and sales. The money goes to finance government programs and other costs.Tax Return:The government form that you use to file your income taxes. You send the form to the Canada Revenue Agency.Down Payment:The money you put into buying a large item like a car or home.Income Tax:A charge you pay based on your total income from all sources. The Canadian government and your province set the rate.
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