Retirement Planning Account
Retirement planning today has taken on many new dimensions that never had to be considered by earlier generations. For one, people are living longer. A person who turns 65 today could be expected to live as many as 20 years in retirement as compared to a retiree in 1950 who lived, on average, an additional 15 years. Longer life spans have created a number of new issues that need to be taken into consideration when planning for retirement.
Registered Retirement Savings Plan (RRSP)
An account that is used for investment assets and holding savings RRSP’s have many kinds of advantages when it comes to taxes. As long as they fall within the guidelines of the Canadian Income Tax Act. Mutual funds, income trusts, mortgage loans, bonds, and savings accounts are all approved assets. RRSP rules will determine the max contributions, allowable assets, and the converting of the account to a Registered Retirement Income Fund (RRIF) at age seventy one.
Tax deferred investments as long as they remain within the plan
Only your registered plan you may hold cash, bonds, mutual funds, and other types of investments
Tax deductible contributions
Registered Retirement Income Plan (RRIF)
A RRIF is a tax-deferred retirement plan under Canadian tax law. Individuals use an RRIF to generate income from the savings accumulated under their Registered Retirement Savings Plan (RRSP). As with an RRSP, an RRIF account is registered with the Canada Revenue Agency.
Investments compound tax-free as long as they remain in the plan
Holdings can be chosen from a wide range of options
The ability to leave remaining RRIF assets to heirs
Can split RRIF income with their spouse if spouse is at least 65 years of age