The 4 D's of Registered Retirement Savings Plans (RRSPs)

RRSPs help us to minimize taxes and remain an important retirement savings strategy for many families.

The 4 D’s of tax reduction when it comes to RRSPs are deduct, defer, divide & decrease.

RRSPs provide an immediate tax deduction in the form of the well-known refund you get for contributing and a tax deferral until withdrawal as you are not taxed while your portfolio grows. They also allow you to divide retirement income with spousal contributions and may allow you to decrease the tax rate on withdrawal if you are in a lower tax bracket in retirement years.

Be aware that higher future tax rates may take back some of the tax savings on withdrawal and that additional astute strategies are available which may better suit your present situation.

If you have any questions regarding RRSPs or your situation please contact our team.