Team Creditaria Financial Group
A RRSP (Retirement Register Savings) account is an investment account designed to help Canadian residents save for retirement. Contributions made to an RRSP account may be deducted from taxable income, which may reduce taxes due in the year the contribution is made. If you want to learn more, keep reading.
How do RRSPs work?
Investors have a range of options to choose from when it comes to investing their money in an RRSP account, including stocks, bonds, mutual funds, and more. The best part is that the earnings generated are tax-free as long as they remain in the account.
However, when RRSP account holders withdraw money from the account, either during or before retirement, the amount withdrawn will be considered taxable income and will be taxed accordingly.
It's worth noting that there are some limitations to keep in mind with RRSP accounts, such as annual contribution limits and restrictions on early withdrawals. In case the account holders withdraw money from the account, either during or before retirement, the amount withdrawn will be considered taxable income and will be taxed accordingly.
In general, RRSP accounts are a popular tool to help Canadians save for retirement and reduce their current tax burden.
When should you invest in your RRSP account?
As we discussed earlier, every dollar you contribute to your account is tax deductible, so it's generally in your best interest to invest in your RRSP when your tax rate is high.
At Creditaria Financial we can help you open an RRSP account and advise you on the best strategy so that you obtain the greatest tax benefits.
