Investing with ATB:
Understanding RSPs
A Retirement Savings Plan (RSP) is a plan that is regulated by the federal
government and allows you to save money now to enjoy your retirement
years. Your contributions to an RSP are made during your prime income
earning years. The prime benefits of an RSP are that your contribution
provides you with a tax break now, and grows tax-deferred until you retire.
By starting your RSP plan today, you can ensure your retirement goals
are achieved.
An RSP can hold many different types of investments, including
savings accounts, mutual funds, Guaranteed Investment Certificates (GICs), stocks and bonds.
Benefits of an RSP
- Shelter From Tax
When you have an RSP, 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when funds are withdrawn from the plan—presumably in retirement,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.
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