What are the benefits of saving money in an RRSP?
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Our response:
There are a number of benefits to saving in a Registered Retirement Savings Plan (RRSP). For example:
- Contributions are tax deductible – you claim your RRSP contribution as a deduction on your tax return
- Savings grow tax-free – you won’t pay tax on investment earnings as long as they stay in your RRSP
- You can borrow from your RRSP to buy your first home or pay for your education
There are other benefits which you can read about in 5 reasons to open an RRSP.
You may also be interested in learning about Tax-Free Savings Accounts (TFSAs) and the difference between TFSAs and RRSPs so that you can decide what type of plan suits your investment needs. Here is information about TFSA basics.
Speak to a registered financial advisor or tax professional for advice about the options that work best for your investment plan.