The best RRSP investments for 2020

Feb 22 15:02 2020 Print This Article

A Registered Retirement Savings Plan (RRSP) is an investment plan that is registered with the Canadian federal government. RRSPs are often described as being “tax-advantaged.” That means you don’t pay income tax on the amount you are contributing to an RRSP, in the year you earn that contribution. However, you will have to pay income tax when you withdraw money during your retirement. The advantage is built on the assumption that your income is higher now than it will be during retirement. If you plan things right, you will be in a lower tax bracket in retirement, meaning that you pay less tax on your withdrawals than you saved initially by stashing your money inside an RRSP.

You can open an RRSP and contribute income up until the age of 71, at which point it has to become a Registered Retirement Income Fund (RRIF) and you begin to withdraw the money as taxable income. 

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Money Sense

MoneySense is a Canadian personal finance and lifestyle magazine published by Rogers Publishing Limited, a division of Rogers Communications.Written for Canadians who want to take financial control of their lives, MoneySense is Canada's best-selling investment and lifestyle magazine, helping readers make smart, informed decisions about how to get the most from their money. The magazine has received many awards, including multiple National Magazine Awards and CFA Society Toronto Awards.

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