Many Canadians are looking for more ways to have their saved money work for them, rather then just working for their money.
An RSP (Retirement Savings Plan) is a great way for you to achieve not only having your money work for you, but increased tax benefits and down payment costs.
Lydia Natstiuk, franchise owner of the H&R Block in Drumheller explains, "The benefits of having an RSP is when you put money into an RSP, you are reducing the amount of taxable income that you have. This way, you are not paying as much income tax during the year."
An example you can use is as follows:
If you make $60,000 a year and have saved an amount of $5,000 in your RSP, the income you are now taxed upon is only $55,000 for the year.
Natstiuk also says, "The individual amount that people can put into their RSPs is an individual choice. The maximum you can put in per year is 18% of your annual income."
If you can make the commitment to save money into your RSPs, it will only benefit your life choices, down the road.
Lydia also had great news for future home buyers saying, "If you're a first time home buyer and you have money in your RSP, you can borrow money from yourself, tax-free to use as a down payment on your house."
It might be about time your money starts working for you.