People are living longer and daily expenses continue to rise, so budgeting for retirement is not as straightforward as it once was. It’s important to think about what your future financial goals are and how you can work towards them. What does retirement look like for you? This may not be a question we ask ourselves regularly, but it should be. It’s never too early to save for the future.
If you’re looking for the most cost-effective way to save for retirement, a Registered Retirement Savings Plan (RRSP) is exactly what you need. In this month’s blog, we discuss RRSPs and 5 benefits of having one.
What is an RRSP, Registered Retirement Savings Plan?
The RRSP was introduced in 1957 to help Canadians invest for retirement. From the moment you start working, you can set up and start contributing to a RRSP until you reach the age of 71. The maximum RRSP contribution is 18% of your gross income per year.
Everyone deserves to feel financially secure. Imagine a world where you are debt-free and have enough money to fund a lifestyle that aligns with your needs. A RRSP (Registered Retirement Savings Plan) is an excellent way to achieve that peace of mind. You can put some money aside each month so that you have a significant lump sum when you reach retirement. It really is that simple! Many people forget that life extends far beyond retirement. Take care of your future self with a RRSP that works for you.
One of the main benefits of a Registered Retirement Savings Plan is that it’s tax-deductible. All contributions up to your annual maximum limits in a RRSP can be deducted from your current year tax return. This is an excellent way of reducing the amount of tax that you pay each year. Topping up, prior to the deadline, could also potentially provide you with a tax refund.
Invest in yourself with a RRSP
Going to college and buying your first home are significant milestones but they both come at a cost. A RRSP enables you to withdraw funds for your education or your mortgage, without penalty. The Home Buyers Plan allows you to withdraw up to $35k for a down payment on your first home, repaid over 15 years. The Lifelong Learning Plan allows you to withdraw up to $10k per year or $20k maximum for educational purposes. Investing in yourself is easy with a Registered Retirement Savings Plan.
Did you know that you can hold different investments within a RRSP? Investing is when you really see the potential of a RRSP unfold. Stocks, bonds and mutual funds are just some of the types you can invest. We recommend investing consistently, in order to get the best return on your income. One way to do this is to set a pre-authorized payment method directly to your RRSP account so your savings can grow without needing to be manually topped up each year.
Another way of increasing your savings is to participate in a Group Registered Retirement Savings Plan (RRSP) at work. Many employers match your contribution based on an agreed percentage of your salary. This is a quick and easy way to growing your income, without any additional investment from you. It may be worth reaching out to your HR department to find out if a group RRSP can be put in place and how you can join.
At Open Access, we specialize in helping employees retire well by providing them with group retirement saving plans. Our sales team are available to answer any group retirement queries you may have or to discuss implementing a group RRSP for your workplace.
If you are looking for a Canadian group RRSP provider that you can trust, you are in the right place! Contact us here to find out more about how we can set up a group retirement plan to help your employees retire well. They deserve it.