Registered Retirement Savings Plan

1046 Words Mar 6th, 2014 5 Pages
Taxation Assignment
Registered Retirement Savings Plan
(RRSP)

Submitted By:
Instructor:
Date:

What is an RRSP?
A Registered Retirement Savings Plan (RRSP) is a tax-deferred account designed specifically for retirement savings. Any resident of Canada under the age of 71 who has earned income may establish and contribute to an RRSP. (Edward Jones, 2013)
RRSPs are the Canadian government's way of helping citizens save their money for retirement. Saving for 30 to 40 years of retirement may seem like a long task, but well-planned contributions and withdrawals from your RRSP can be a great way to get enough money for when you retire.
Objective
The objective of a RRSP is to provide individuals with an account which they may
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The maximum you can take out in one year is $10,000. You won’t pay any tax on it as long as you pay it back over 10 years. This does not include paying for a child’s education.

My conclusion is that RRSPs benefit Canadians by reducing their taxes and allowing their savings to compound tax free. Individual RRSP’s are the most common type of RRSP’s. RRSP contributions are deducted from earned income before it is taxed, so the money that you put into an RRSP is not taxed until it is withdrawn. Taking money out of an RRSP account before retirement can be very expensive because withholding taxes often apply. The RRSP Home Buyer's Plan allows contributors to borrow RRSP funds to finance the purchase of a home. Also that it would be the best to start making contributions early to avoid early withdrawals.

Works Cited
Investopedia. (2009, February 25). Retrieved December 10, 2013, from Investopedia Website: http://www.investopedia.com/university/rrsp/
Canada Revenue Agency. (2013, January 8). Retrieved December 11, 2013, from Canada : http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/wthdrwls/menu-eng.html
Canada Revenue Agency. (2013, January 3). Retrieved December 10, 2013, from http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/rrsps-eng.html
Edward Jones. (2013). Retrieved December 10, 2013, from Edward
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