RRSP- Registered Retirement Saving Plan
What is a RRSP?
A Registered Retirement Savings Plan (RRSP) is an investment account designed primarily for saving toward your retirement years. As a retirement savings vehicle, regulated by the Canadian government, RRSPs have special tax benefits. Your annual RRSP contribution can greatly reduce the amount of income tax you pay in that year, and the money you put away can have years of tax-deferred growth potential. You only pay tax on the amounts you withdraw. Contributions to an RRSP can only be made by individuals with "earned income" taxable in Canada, which includes salaries, self-employment income, maintenance and alimony payments, and net rental income (but does not include income from pensions or investments).CRA issues statements to individual taxpayers with their "Notice of Assessment" informing them of their RRSP contribution limit for the following year.
What is a spousal RRSP?
The more taxable income you have, the higher your tax bracket. You should, therefore, consider allocating future taxable income as evenly as possible between you and your spouse or common- law partner. This is commonly known as "income-splitting".You are entitled to put all or part of any allowable RRSP contribution into an RRSP in the name of your spouse or common-law partner. When you both withdraw your RSP savings during retirement, the combined income tax you pay as a couple may be lower than what you would pay if all your savings were in a single RRSP.As the contributor to a spousal RRSP, you benefit from the tax deduction while building a retirement nest egg for your spouse or partner. Amounts withdrawn from a spousal RRSP will be considered part of the taxable income of your spouse or partner, to the extent that you have not contributed any amount to a spousal plan in the current year or the two preceding years. A spousal RRSP is most beneficial in a situation where the spouse would otherwise have little retirement income while the contributor would have a significant amount of income.
Home Buyer's Plan
The Home Buyer's Plan allows you to remove funds from your RRSP in order to purchase a first home. If you are married both you and your spouse may each contribute up to $20,000 from your RRSP's towards your purchase ($40,000 in total).A first home means that neither of you can have been a home owner for the previous four years.Revenue Canada has literally hundreds of pages that describe the home buyer's plan. Check this link: HBP

 

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