Deciding how and where you save your money is big part of your retirement plan. In Canada, the federal government and employers offer incentives to help you save money and build your retirement nest egg.
3 ways to save for retirement
RRSP – Lets you reduce your taxable income. Your savings grow tax-free as long as your money stays in the plan. You choose how to invest your savings. Learn more about RRSPs.
TFSA – Lets you save tax free for any goal. As of January 1, 2019, you can save up to $6,000 a year and withdraw it whenever you want without paying any tax. Learn more about TFSAs.
Workplace pension and savings plans – Pension plans, group RRSPs and other savings plans can be a convenient way to save because your contributions come off your pay cheque. And if your employer matches your contributions, your savings power is doubled. Learn more about pension plans.
2 key points
You can deduct your RRSP contributions, up to certain limits, from your taxable income. You pay tax on withdrawals.
You can’t deduct your TFSATFSA See Tax-Free Savings Account.+ read full definition contributions. But you don’t pay taxTax A fee the government charges on income, property, and sales. The money goes to finance government programs and other costs.+ read full definition on any withdrawals.