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News Room
Cambrian is in your community! Check this page frequently to find the latest on our community involvement, sponsorship, news stories, and newsletters.
 
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RRSPs 101
RRSPs are one of the best ways to save for retirement by offering an easy way to defer taxes while saving for the future. While not all RRSP strategies are complicated, there are many complexities involved that can lead to a lot of confusion.
 
Here are some RRSP basics that should give you a good start to understanding why RRSP contributions can be such an important and powerful savings tool:
 
One does not invest in an RRSP – the RRSP is simply a plan registration (hence the tax deferral). What you do invest in is a registered savings account, GIC, mutual fund, etc. These are the products that will earn you a return. Registering those investments as RRSPs serves to give you a tax deduction in the current tax year, and allows for withdrawals in retirement years. What’s so powerful about the RRSP is that you save money now by sheltering your contributed amount from income tax, as well as sheltering any interest you earn in the registered product until it is withdrawn. This adds up to huge compounding interest over the years!
 
You may contribute to your RRSP until December 31 of the year in which you reach age 71.  Your allowable annual RRSP contribution is the lower of:

- 18% of your earned income from the previous year, or
- The maximum annual contribution limit for the tax year ($21,000 for 2009), or
- The remaining limit after any company pension plan contributions.
 
You can find the exact amount you can contribute to your RRSP on the Notice of Assessment sent to you by the Canada Customs and Revenue Agency each year.
 

Cambrian offers a variety of options to fit into your RRSP strategy, from registered savings accounts and GICs to mutual funds and stocks. Our branch staff and investment specialists would love to speak with you to begin developing or to review your strategy. Ask us about it today!
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