“How it works”
RRSP is an account that is set up for saving for retirement:
but it’s a little more than that. Let’s say you put away $12,000 into an RRSP
what happens now is the government will make it seem as if you didn’t make that
$12,000 that year.
“How RRSP taxing
works”
Let’s say you make 50,000 a year and every year you were to
put 12,000 into an RRSP then you will only be taxed on the other 38,000 you
made. And let’s say you did this every year then when you retire, As soon as
you touch that money, you will pay takes on how much you take out so if you had
$100,000 and took out 10,000 you would then have to pay tax on the 10,000 you
took out and not on the 90,000 you still have in your RRSP account. Plus you
get interest credit on the money that’s in your RRSP
“Benefit’s”
It allows you to pay less tax now, it acts as a locked box,
and it gets you interest credit so you make money as you do it
