RRSP Guelph

RRSP Guelph

RRSP accounts are ideal for anyone who doesn’t have an adequate pension plan or want a higher income after retirement. You or your spouse can make financial contributions through RRSP eligible investments such as mutual funds and stocks. These contributions are generally tax-deductible and the income earned is also tax exempted. For further details regarding RRSP, contact Punjab Insurance. We cater to customers in Guelph.

How does RRSP work?

In an RRSP investment plan, you or your spouse make regular contributions towards the account. The amount is tax-free till you withdraw from the account. The amount will grow within the plan and you can choose to withdraw it after your retirement.
The maximum of tax-deductible contribution you can contribute should be less than

  • The previous year’s pension adjustment
  • 18% of the previous years’ income
  • The unused RRSP contribution room at the end of the preceding taxation year

Types of RRSP

  • Individual and group RRSP: The benefits for group RRSPs are similar to individual, RRSPs.:
    • Employee contributions are considered as additional salary
    • Both employees and employer contributions are considered as tax-deductible
    • Employees contribute through wage deduction matched in partial or whole by the employer
  • Self-directed and managed RRSPs: The account holder chooses from a varied range of investments. If the plan is self-directed, the RRSPs are available through banks, trust companies and investment dealers. If it’s managed, the deposit is invested in products held in trust under the plan.
  • Spousal RRSPs: You make the contribution on your spouse’s behalf. However, the contribution amount should be within the limits of your spouse’s contribution plan. If you withdraw any amount from the RRSP it will be treated as taxable income for your spouse.

You can borrow up to $25000 from you RRSP account if you are planning to buy a house (First Time Home Buyer Plan) or $20000 (Lifelong learning plan) with an annual limit of $10000 if you are planning to take up a full-time training or education course.

What is better, RRSP or RESP?

Well, it depends on your circumstances and your priorities. RESP is for your children’s higher education, where RRSP is to make life after retirement a bit easy. Whichever you choose both will contribute to your family’s long-term financial security.

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