RRSPs are the Canadian government’s way of helping citizens save their money for retirement. Saving for 30-40 years of retirement may seem like a daunting task, but well-planned contributions and withdrawals from your RRSP can be a great way to get the best bang for your retirement Income. This savings Plan also provides the ability to reduce income taxes until retirement.
Are you in a high tax bracket and would like to diversify some of your hard earned income while still saving for your retirement at the same time? RRSP’s may be your key to long-term success. RRSPs give you the ability to obtain tax savings while investing in low, moderate or even high risk investments for the more aggressive investor. RRSP’s are for your retirement and everyone has intentions to retire at some point in there life. Due to mixed rumors about these investments we find ourselves working longer with lack of funding for our families. So, if your question is still do I need them, the answer is yes. Absolutely!
RRSP’s should be considered if you are self-employed, if you are not contributing to an employee pension program, or if the Canadian Pension Program will be insufficient to maintain a decent and comfortable lifestyle for your needs.
RRSP’s purchased through an Insurance Company are held in Segregated Funds of which are very different from what you may be used to at the Bank. Segregated Funds work like Life Insurance policies guaranteeing your principal investment where as Mutual Funds are more volatile with no guarantees.