RRSP guide (2022) Financial Plan for Canadians

1. What is RRSP?

RRSP stand for Registered Retirement Savings Plan. It provides Canadians with an opportunity to save for retirement.

Advantages of RRSP:

Contributions are tax deductible. Example: If your annual income is $50,000 and if you contribute $5,000 in RRSP, then your taxable income would reduce to $45,000

Contribution room: An individual can contribute up to 18% of their earned income up to a maximum of $29,210 for 2022 .

Tax Deferred growth, which means any growth within the account is not taxed. Example: Individual A invests $5,000 in RRSP and after one year, his RRSP grows to $6,000. This individual would not be required to pay any tax on the growth.

Various Investments options within RRSP like ETF’s, mutual funds, stocks, GICs etc.