Assignment 3 Oral Presentation & Discussion- Lennox, Abbygale (1) (1)

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Trent University *

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2319

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Finance

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Apr 3, 2024

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Lennox, Abbygale MGT2319_450 Assignment #3 Registered Retirement Savings Plan (RRSP) I NTRODUCTION A Registered Retirement Savings Plan (RRSPs) stand as a core foundation plan for Canadian financial planning that provides individuals with a tax-efficient means to save for their retirement, they provide you the ability to grow your funds tax-free and offer many advantages. Typically, these are organized through a financial organization like your bank. These plans allow individuals to allocate a portion of their income into their investments and provide a tax benefit while helping with long-term wealth accumulation. (What is an RRSP?, 2023) . B ENEFITS OF AN RRSP RRSPs offer many benefits for an individual. One of the primary advantages are the tax-deferral structure they provide, contributions made into an RRSP are tax-deductible, this means they reduce taxable income for the year that they are made (What is an RRSP?, 2023) . Your contributions that are made grow at a tax-free rate; this allows for compound growth over time. RRSPs have always been a safe and reliable way to source your retirement income, used alongside other pension plans (What is an RRSP?, 2023) . M AKING W ITHDRAWALS FROM YOUR RRSP Making withdrawals from your RRSP are always subjected to certain rules and tax implications. The rule-of-thumb is generally, withdrawals are permitted penalty-free starting at the age of 71, this is when your RRSP must be converted into a Registered Retirement Income Fund or annuity (Registered Retirement Savings Plan (RRSP), 2024) . Your withdrawals are taxable income and will be taxed at the individuals marginal tax rate, this means it is treated as any other income earned, based on your income and tax bracket is the rate on which you will be taxed at the time of withdrawal. T HINGS TO THINK ABOUT WHEN CONSIDERING AN RRSP When considering opening an RRSP here are some things you should think about. When making contributions, individuals should attempt to maximize their tax benefits and long-term saving potentials. How much can you afford to put away each year? How much are you allowed to put into an RRSP each year? Be aware of the withdrawal rules in place and potential penalties. P ERSONAL I MPACT The topic of RRSPs directly relates to me, as I am an individual who is thinking about my future and part of your future is the thought of retirement. Contributing to an RRSP will allow me to reduce my taxable income and provide me tax savings. Creating an RRSP will help me feel more secure and safe when thinking about my retirement. RRSPs provide many benefits to an individual and part of me entering my adult life is thinking about next steps and what happens later in life, this is why I will be looking into RRSPs and getting a start on saving for my retirement. C ONCLUSION Overall RRSPs play a crucial role in Canadians retirement planning, they offer tax advantages and long-term wealth building opportunities. By understanding RRSPs and the benefits they serve, individuals can take the initiative and the steps towards securing their financial future.

R EFERENCES Registered Retirement Savings Plan (RRSP). (2024, 01 15). Retrieved 02 24, 2024, from https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/ rrsps-related-plans/registered-retirement-savings-plan-rrsp.html What is an RRSP? (2023, 04 23). Retrieved 02 24, 2024, from https://www.scotiabank.com/ca/en/personal/advice-plus/features/posts.your- guide-to-rrsps.html

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