RRSP Chinese literal translation is Registered Retirement Pension Plan
It is a financial product provided by the Canadian government with tax avoidance, tax deferral and pension planning.
In short, if you think that your income in 2022 is relatively high and you don’t want to pay too much tax, you can use RRSP as one of the means of tax avoidance, but it is worth noting that the contribution of tax-avoided RRSP in 2022 is now It is March 1, 2023.
RRSP case sharing
Mr. Wang is engaged in IT work. In 2022 , the T4 annual income is 120,000 , and the tax bracket reaches 40% .
Mr. Wang began to think about planning for his retirement in advance this year, and finally decided to put 20,000 in his RRSP account first, so this 20,000 will not be included in the taxable income in 2022, and he will get an additional tax rebate of $ 8,000 ( 20,000 x 40 % ) .
In addition, the 20,000 RRSP is invested in the fund. When Mr. Wang retires, regardless of the return on investment, the tax bracket of taking out 20,000 is only 10%. Therefore, from the perspective of reasonable tax avoidance, Mr. Wang earns Withdrawing a tax difference of $6000 , I also planned a pension for myself.
