Why should you buy an RRSP? One very simple fact, when you buy an RRSP, you take money out of one of your pockets and put it in another one of your pockets, and most importantly, YOU KEEP IT OUT OF THE GOVERNMENT’S POCKET!
Money earned inside the RRSP is tax free until you take it out.
For every $1,000 of RRSP purchased, you reduce taxes by $300*
The government keeps track of how much RRSP you can contribute every year, and sends you a statement when you file your tax return.
You have until March 1 of the following year to make your contribution-that means you can calculate your taxes and decide how much or how little you want to give to the government. (How often do you get to do that?)
The government increases your contribution limits: The max amount is 18% of your earned income up to an annual dollar limit. In 2008 it was upped from $19K to $20K and it has gone up by $1K a year since then.
*subject to certain terms and conditions.