RRSP's 101
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Coast Capital Savings
It is never too early to start saving for the future.
On average Canadians are spending $1.62 for every dollar they earn – making it safe to assume that saving for the future gets pushed down the priority list.
Still in the dark about what an RRSP is and why you should get one? Read on for what we call, RRSP 101.
What is an RRSP and how do I qualify?
- RRSPs are the government’s way to encourage Canadians to save money for their retirement. The amount contributed is tax-deferred meaning you won’t have to pay a cent until after you tap into your RRSP and claim them on your tax return.
- There are only two requirements that you have to fulfill; you must be earning income subject to Canadian Taxes and be under the age of 71 or younger.
Where do I start and how much do I put in?
- The earlier you start the better!
- If you start early you don’t have to put in a whole lot. Start by setting up an automatic transfer that aligns with your income and payday schedule and go from there.
Why start an RRSP?
- Old Age Security and Canada Pension Plan benefits will only take you so far. RRSPs help you retire comfortably.
What goes Into an RRSP account?
- Aside from cash, a wide variety of investments can be held in your RRSP: guaranteed investment certificates (GICS), mutual funds, and bonds. What you put in depends completely on your risk appetite and personal preference.
RRSPs aren’t your only options when it comes to saving – speak to a financial advisor about the best fit for you.
With a promise to build a richer future for youth in our communities, Coast Capital Savings is a regular contributor to InTouch e-News, and active supporter of Kwantlen Polytechnic University’s work to provide young people with vital educational and career skills to become successful leaders and contributors to society.