What are the advantages of RRSPs?
1. Shelter From Tax When you have an RRSP, income earned on your investments is sheltered from tax. You do not pay on the annual income as you would with other types of investments. Instead, the tax is paid when funds are withdrawn from the plan—presumably in retirement, when your other sources of income are much lower. 2. Reduced Current Income Taxes Because RRSPs are fully deductible (up to your max.) on your income tax return, you also save taxes immediately.
