Why Do I Need A RRSP?
Why Do I Need A RRSP?
A RRSP is really just a savings plan that is tax free under Federal and Provincial income tax legislation. If an individual contributes to a RRSP, the contributions are not taxed as part of the individual's income. Nor are investment earnings inside the RRSP (i.e. interest, dividends and capital gains) taxed. Funds have to be withdrawn from the RRSP to be taxed and this does not have to happen until age 69. Since contributions and investment earnings are not taxed, the funds inside the plan grow at a much faster rate than if they had been saved outside the RRSP. This "tax-free compounding" is very powerful and allows a much greater accumulation of funds inside the RRSP than would otherwise be the case.
Registered Retirement Savings Plans
Group Registered Retirement Savings Plans
Interest Compounding
Taxation Of Investments
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