Registered Retirement Savings Plans

RRSPs allow taxpayers to minimize their tax burden by making tax-deductible contributions toward their retirement while they are in their higher-taxed, income-producing years. They can defer the tax on the growth while they build their nest egg inside the plan and withdraw the funds when they reach retirement at a time when they may be in a lower tax bracket.

Contributions to an RRSP are generally allowed up to December 31st of the year an individual turns 71, subject to the individual’s RRSP deduction limit.

Unused contribution room is carried forward indefinitely. Contributions made in the current year or in the first 60 days of the following year can be deducted against the current year’s income.

Earned income includes: income from employment, net rental income, net business income, certain support payments received, CPP disability payments. Earned income does not include: RRSP/RRIF income, interest income, capital gains, dividends, CPP (other than disability, Old Age Security, Worker’s Compensation, or retiring allowance).

In some circumstances, when leaving an employer, you may be able to transfer the value of your pension plan, untaxed, directly to an RRSP. Discussing your options with a LCU Financial Planner before choosing may help maximize your benefits.

For more information contact one of our certified LCU Financial associates.


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