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Registered Retirement Savings Plans |
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An RRSP is not simply an investment. It is a government sanctioned registered program that allows you to save for your retirement. You are allowed to invest in a broad range of products within an RRSP, including GICs, mutual funds, individual stocks and bonds |
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RRSP Limits
Your RRSP limit for the current year is determined as follows:
- Your unused RRSP deduction limit carried forward from prior years
- Plus 18 percent of your previous year’s earned income ( up to a maximum of $16,500 in 2005, $18,000 in 2006, $19,000 in 2007, $20,000 in 2008, $21,000 in 2009 and $22,000 in 2010)
- Less any pension adjustment for the prior year ( for those who have company pension plans )
Timing
For an RRSP contribution to be deductible, it must be made within 60 days of the calendar year end (i.e., March 1, or February 29 in a leap year). If the deadline falls on a weekend, it is extended to the next business day.
Your Options At Age 71
Government legislation presently dictates that you have to collapse your Registered or “locked-in” money by December 31st in the year in which you turn 71. Upon doing so, you have three main options.
- DIPLOMA, for a comprehensive solution
- Monthly contribution program, through pre-authorized contributions (PAC)
- Education bonus paid at the end of the PAC program (up to a maximum of 15% of contributions)
- Possibility of contributing lump-sum amounts
- Worry-free administration due to asset allocation based on recipient's age
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