RSP season begins with the new year and ends with the start of March. Each year Davlyn helps it’s clients navigate through contribution season and helps them find a path that’s right for them.
Why does Davlyn think RSP season is right for you? While contributing to your RSP may not be in everyone’s financial plan, there are many benefits that anyone can take advantage of each year. Of course, we should all be contributing towards our retirement savings, but the advantages don’t just come once you’ve passed age 71. Contributing to your RSP creates tax deductions from your annual income. Not only that, but when you do finally redeem your savings from your RSP at retirement, you will most likely be in a lower tax bracket, therefore you save yourself the taxes in two ways, one through a tax deduction on your annual income, and one by having deductions taken later at a lower tax bracket.
Your RSP is not only a great savings plan for your retirement, but if you start early, you can benefit while you’re young as well. With the Home Buyers Plan you can withdraw up to $25,000 from your RRSP, without penalty or tax, to be applied to the purchase of your first home. You then have 15 years to repay your RRSP. There’s also the Lifelong Learning Plan. You can use up to $20,000 of your RRSP to pay for your own or your common-law partner’s education. If certain conditions are met, the withdrawal is tax-free and can be paid back to your RRSPs over ten years. Don’t forget that your investment grows tax deferred until you withdraw.
Your RRSP’s tax-sheltered environment maximizes the compound growth of your savings. This is why Davlyn Financial Service Inc. works hard to help our clients meet the contribution deadline each year. Whether you’re a client, a prospective client, or a curious investor, talk to us today about your RSP contribution options.