Retirement Savings

The #1 reason for contributing to an RRSP is to provide you with another source of retirement income. While contributing to your RRSP over your working years, you receive an immediate tax benefit as the contributions are tax deductible. Your retirement savings then grows, tax sheltered within the plan. The result is that when you retire, you have a nest egg to draw on to supplement your other sources of income.

If you have a spousal RRSP, the potential benefit is even greater. You have two plans to build up over your working years and two plans to draw on when retirement comes. In addition, income-splitting strategies during your retirement years minimize your collective tax bill.

Home Buyer's Plan

The Home Buyer's Plan allows you to borrow funds from your RRSP to purchase your first home. If you qualify, you and your spouse can each borrow up to $20,000 - a total of $40,000 - from your RRSPs to use as a down payment. See more information on the Home Buyer's Plan.

Lifelong Learning Plan

The Lifelong Learning Plan allows you to withdraw up to $10,000 per calendar year from your RRSP to finance full-time training or post-secondary education for you or your spouse. See more information on the Lifelong Learning Plan.

Emergencies

Your RRSP holdings can be used to cover an emergency situation. However, there is a tax consequence to doing so and an impact on your retirement plan. Any withdrawal is considered taxable income for the year and a withholding tax will be charged upfront when you withdraw the funds.