It’s RRSP Season, Get Your Savings Working for you

What is an RRSP?

“Registered Retirement Savings Plan.”

An RRSP is what’s called a tax-advantaged account, meaning that the government created them specifically to provide tax breaks to those who invest money in RRSPs as a way to motivate them to put away money for their retirement.

Benefits of the Registered Retirement Savings Plan

Here’s how a tax-deferred account like an RRSP works. Let’s say you make $70,000 a year and you decide to put the maximum allowable into your RRSP—$12,600. When tax day comes around, the CRA will treat you as though you earned just $57,400.

Can an RRSP be used to buy a house?

With the federal government’s Home Buyers’ Plan, you can use up to $35,000 of your RRSP savings ($70,000 for a couple) to help finance your down payment on a home.

To qualify, the RRSP funds you’re using must be on deposit for at least 90 days. You must also provide a signed agreement to buy or build a qualifying home.

*Please note that there are lenders offering RRSP loans, but please contact your financial planner for more information.