Thinking about a registered retirement savings plan?

Tax Tips with Lana Laskovic of Armour Mountain Office Services

Are you thinking of making a RRSP Contribution? Do you want to know how much you need to contribute?

March 2, 2015 is the deadline for contributing to an RRSP for the 2014 tax year.

An RRSP is a retirement savings plan that you establish, that we register, and to which you or your spouse or common-law partner contribute.

Deductible RRSP contributions can be used to reduce your tax.

Any income you earn in the RRSP is usually exempt from tax as long as the funds remain in the plan; you generally have to pay tax when you receive payments from the plan.

Setting up an RRSP

You set up a registered retirement savings plan through a financial institution such as a bank, credit union, trust or insurance company.

Your financial institution will advise you on the types of RRSP and the investments they can contain.

You may want to set up a spousal or common-law partner RRSP.

This type of plan can help ensure that retirement income is more evenly split between both of you.

The benefit is greatest if a higher-income spouse or common-law partner contributes to an RRSP for a lower-income spouse or common-law partner.

The contributor receives the short term benefit of the tax deduction for the contributions, while the annuitant, who is likely to be in a lower tax bracket during retirement, receives the income and reports it on his or her income tax and benefits return.

You may want to set up a self-directed RRSP if you prefer to build and manage your own investment portfolio by buying and selling a variety of different types of investments. If you are considering this type of RRSP, be sure to consult with your financial institution.

If you have any questions about your RRSP contributions you can contact:  Armour Mountain Office Services, #1 – 4353 Connor Road, Barriere, B.C., V0E 1E0.  Or call 250-672-9994, or email: ambats@live.ca