Registered Retirement Savings Plan(RRSPs)

RRSPS were created in 1957 and by the 1980s - and continuing to the present - became the cornerstone of most Canadians' individual retirement savings. There are a multitude of investment options that can be held inside an RRSP, including GICs, Segregated Funds, GMWBs and Mutual Funds, amongst others.

There are 3 principal benefits of an RRSP:

  • They allow for up to 18% per year (up to a certain dollar value) of earned income to be deposited. The deposit is fully deducted against earned income
  • All investment growth while inside the RRSP is tax sheltered - i.e. there is no requirement to report any capital gains, interest or dividend income on an annual basis
  • When the RRSP matures - by age 71 under current legislation - only the income that is withdrawn will be reported for tax purposes. The remainder of the capital continues to enjoy tax sheltered growth inside either an Annuity or a Registered Retirement Income Fund (RRIF).