January 1, 2016
- You can contribute to an RRSP if you are a Canadian and earn income – up to $24,930 for the tax year of 2015, depending on your income, up to age 71.
- Your RRSP contributions reduce your taxable income, and your savings accumulate without taxation are not taxed until you withdraw them at retirement when you may be in a lower tax bracket.
- Any addition to your contributions, including capital gains, interest, dividends, and any other growth via dividends or distributions paid out on an investment fund also are not taxable in an RRSP. However, taxation occurs once income is withdrawn from your RRSP.
- You have until February 29, 2016, to purchase or top up your Registered Retirement Savings Plan (RRSP) Normally you have to March 1 unless it is a leap year as it is this year.
- Annual RRSP contributions can reduce the amount of income tax you pay in the year of your contribution. These monies invested annually grow on a tax-deferred basis, and tax is only paid at the time of withdrawal.
- Contributions to an RRSP can be deducted from your taxable income allowing you to pay less tax on the money you make, which can leave you more money to invest for retirement.
- After you contribute to an RRSP, you can claim an equivalent deduction from taxes you owe to Canada Revenue Agency (CRA). Many people use the tax saved to make an RRSP contribution for next year or pay off after-tax debt such as credit cards.
- Your own Contribution Limit limit that you are allowed to deduct for your income taxes can be found on your Last Year’s Deduction Limit Statement on your latest Notice of Assessment or Notice of Reassessment.
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