In today’s episode, we’re going to talk about Registered Retirement Savings Plans (RRSPs). With the contribution deadline of March 1st 2021 quickly approaching, it’s a topic you’ll be hearing a lot about this month. And while many people regularly contribute to their RRSP, they don’t always know all the benefits of having one, or other ways they could be leveraging it. So today, I’m going to break it all down for you. We’ll cover:
What they are
How they work
Who they benefit, and
Why you should consider one.
I’m also sharing some smart ways you can leverage an RRSP that you may not know
Using your RRSP to help pay for your first home.
Using your RRSP to help pay for your education.
Using your RRSP to allow incoming-splitting in retirement to reduce taxes.
Why using your RRSP refund to contribute to your TFSA is a smart strategy.
When it makes sense to carry forward your RRSP contribution room.
In the year you turn 71 you need to convert your RRSP to a RRIF. If you're still working, it may make sense to overcontribute to the RRSP and pay a penalty when it will create an additional tax deduction.
Helpful tools and resources:
Who can participate in a Lifelong Learning Plan link