In today’s B’s Finance Minute, let’s talk about RRSP or Registered Retirement Savings Plan. What are your benefits when You invest in RRSPs? First is you can reduce the amount of Income tax you are paying. Second, all the Interest you make Is tax free. Third, you can use your RRSP as downpayment when buying your first home. How does it work? When you Purchase an RRSP for $5,000, your income is simply reduced by $5000. Since you paid the tax to the government for that $5000, they have to refund or return the taxes you paid on that money. If you are in a 20% tax bracket, you get $1000 back. If you are in a 30% tax bracket you will get $1,500 back. You can use that money for anything you want. Second benefit is all the interest that you gain while the money is inside the RRSP is tax free which means even if you double your money the you don’t pay any tax on it. Third, you can use that RRSP for your downpayment when buying your first home. You can use up to $25,000 per person. This maximum limit ss changing to $35,000 by the Fall of 2019. Thank you for reading. I want to make a Difference to thousands of people. Please Like & Share so you can too!
DISCLAIMER: The information in this post is solely advisory, and should not be substituted for legal, financial or tax advice. Any and all decisions and actions must be done through the advice and counsel of a qualified attorney, financial advisor and/or CPA. We cannot be held responsible for actions you may take without proper financial, legal or tax advice.
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