What are the benefits of investing in an RRSP?
- Tax-Deferred Savings
- Tax Deductions
- Optimizing Deductions
- Income Splitting
- Financing your First Home or Education
There is no minimum age requirement to open an RRSP. You can open an RRSP and make contributions at the end of the year in which you turn 71 as long as you are a resident of Canada, earn income, and file taxes.
Generally speaking, the earlier the age to open an RRSP, the better! It's never too early to start investing for retirement. In fact, depending on the type of investment product you hold, investing early may give you the benefit of tax-deferred compounding.
As long as your funds are not in a lock-in plan, you can withdraw your RRSP savings before you retire, but withdrawals are usually included in your income and taxed in the year of withdrawal. Starting at age 71, RRSP holders must withdraw all deposits in the account, and can choose to withdraw all their savings at one time, purchase a Life Annuity, or transfer the account to a Registered Retirement Income Fund (RRIF) account, etc.