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Registered Retirement Savings Plan (RRSP)

An RRSP is a savings strategy for your retirement that allows you to invest on a tax-deferred basis.

Your contributions to the plan are allowed to accumulate, along with investment income, on a tax-free basis until the funds are withdrawn during your retirement years. This delay is significant because, although the funds will be fully taxable at that time, you will likely have entered a lower-earning phase of your life, and your tax rate will be lower.

Contributions to an RSP can only be made by individuals with “earned income” taxable in Canada.  Earned income includes salaries, self-employment income, maintenance and alimony payments, and net rental income (but does not include income from pensions or investments). If you are not sure about other types of income that may be eligible, consult a tax advisor or the Canada Revenue Agency (CRA).

RRSPs are registered with the CRA, and their issuance is supervised by an approved financial institution to ensure that rules are strictly followed.

Canadians can contribute to their RRSPs up until the year they turn 69. At that point, RRSPs must be closed down. Investors can then withdraw money or convert it into a Registered Retirement Income Fund or annuity that will pay regular income. In both cases, any money received is taxed.

To learn more about the advantages of an RRSP, visit the Employer Provided Benefits section.

Supplement Retirement Benefits With Old Age Security (OAS)

The Old Age Security program is the cornerstone of Canada's retirement-income system. It is designed to supplement other earnings of Canadian seniors with a modest pension. In addition to any RRSPs you have, OAS can help make life more manageable financially in your later years.

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