Registered Retirement Savings Plan (RRSPs)
A Registered Retirement Savings Plan is one of the best ways to achieve your goal of financial security for your retirement. It allows you to save money for your retirement while deferring taxes on the plan contributions and earnings.
An RRSP is a tax-efficient retirement savings plan registered with the government. Each year, you can invest up to a set maximum amount of money in your RRSP, which is based upon your previous year's income. The money within your RRSP grows tax-sheltered and the proceeds will not be taxed until you begin to withdraw funds from the plan.
Registered Education Savings Plan (RESPs)
A Registered Education Savings Plan (RESP) is a special savings account that can help you, your family, or your friends save early for your child’s education after high school.
The Government of Canada allows savings for education to grow tax free until your child named in the RESP enrolls in education after high school. The child named in an RESP is known as a beneficiary.
A parent, grandparent, other relative, or friend, can open an RESP for a child. The person who opens an RESP is called a subscriber.
Locked In Retirement Account (LIRAs)
A Locked In Retirement Account provides an investment alternative to former employees of a company that has a registered pension plan. The individuals fully vested pension benefits are transferred to a LIRA. Pension plans provide you with an income once you have retired. The monies you transfer out of a pension plan upon employment termination must still be used to provide for a retirement income. Even though you have investment control of the funds, the governing legislation controls the use of the funds. Locked-In savings plans (LRSPs/LIRAs) must be converted to a locked-in income plan by December 31st of the year you turn age 69.
Registered Retirement Income Funds (RIFs)
A Registered Retirement Income Fund allows funds transferred from an RRSP to remain tax-sheltered while continuing to earn tax deferred income, as long as those funds remain in your RRIF. RIFs have become a popular alternative to annuities because planholders have more control over their investments and withdrawals.
While you can convert your RRSP savings into a retirement income option anytime before you reach age 69, it is mandatory that you convert all your RRSPs by December 31st in the year you turn age 69.
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