Canadians are living longer and leading more active lives than ever in retirement. Many of us wonder whether we have enough money to retire comfortably, and whether it will last as long as we need it. Retirement planning is as much about making the most of your retirement years as it is about laying the financial foundation for your future needs.
Deciding how and where you save your money is a big part of any retirement plan. A registered retirement savings plan, or RRSP, is one of the most popular ways to save for retirement.
An RRSP has many benefits including tax advantages and convenience. You can keep your investments – bonds, stocks, mutual funds and many other investment products – in an RRSP. By making contributions into the plan, you can reduce your taxable income today while growing your investments tax-free. The sooner you start contributing, the more money you’ll have when it’s time to retire. Any amount withdrawn is taxed but most Canadians enjoy lower tax rates during retirement as income is typically lower.
Your retirement plan should balance your needs, wants and the reality of your finances.
You’ll need to think about when you plan retire, the kind of retirement lifestyle you want, and the types of investment choices to make based on your investing goals. An RRSP can play an important role in achieving your financial goals.
The RRSP contribution deadline for 2017 is March 1, 2018.
A free RRSP savings calculator and more information on saving for retirement are available at GetSmarterAboutMoney.ca, the Ontario Securities Commission’s award-winning investor education website. You’ll also find unbiased information about investing and resources to help you make informed investment decisions.