Reader Question: RRSP’s-The Need To Know Basics

YOUR RRSP QUESTIONS ANSWERED Reader Question: I want to save for retirement. Where is the best place to save for this? I have been told NOT to use RRSP. Can you help? Saving for retirement is a good thing and RRSP’s (Registered Retirement Savings Plans) are a popular tool for doing so. I don’t know the client’s age or his/her income so this answer is predicated on the fact that the client has several months of income in an emergency fund. An emergency fund is a base component of proper planning and should be done before making any RRSP contributions. Also, it assumes the client is making more than $40,000 in income per year, as incomes under $40,000 don’t benefit much from tax savings on RRSP contributions. Below I will try to define some of the Basics of RRSP’s and also illustrate some of the long-term advantages. When Did RRSP’s Begin? RRSP’s first came into existence in 1957 as a government supported effort to help Canadians save for their retirement.   Types of RRSP’s   There are broadly speaking three main types of RRSP’s Individual RRSP-where the contribution is made in your name and held in your name. Spousal RRSP– […]