Articles, Blog

What Is An RSP?

November 15, 2019

An RSP, or Retirement Savings Plan, is a government incentive to have you plan for your financial future, to put money away for your future. They give you a tax break, or incentive to do that. So if you’re at a 30% marginal tax bracket on your last dollars earned, then if you put $3,000 in an RSP in a year, that’s going to save you $900 payable on your taxes that year. The higher the tax bracket, the more of the tax savings. Some of the benefits of RSP’s is money grows tax differed, it will be taxable to you in retirement but usually at a lower tax rate when people are taking income from their investments. The RPS is the umbrella over top of the investments so you can have any number of investments underneath of it anything from mutual funds, guaranteed investment certificates, stocks, bonds, you name it, things that qualify. You can list a spouse or anyone else as a beneficiary. If the spouse is the beneficiary then the benefits can go directly to that spouse, tax differed. So there’s lots of benefits and it’s really used for retirement planning.

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