3 reasons why it pays to get an RRSP in Manitoba
January 10, 2020
The purpose of an RRSP in Manitoba is to ultimately help you save for retirement. Of course, if you’re retiring tomorrow and haven’t contributed a penny, it might be a little too late to start.
With that said, if you’re just starting out in your career or you’re stuck in the middle between career starter and retiree, it pays to start contributing to an RRSP.
Read our 3 reasons why it pays to get an RRSP in Manitoba… then come pay us a visit. We’ll be able to set you up with an RRSP and have you on your way to financial freedom (and watching that retirement sunset) in no time.
1. Special tax benefits
The main draw of an RRSP is the special tax benefits that help make your retirement dream a reality. When you invest money into an RRSP, you are essentially holding off on paying taxes on that income until it’s withdrawn. The benefit is that you contribute the funds when you are earning more money (and therefore in a higher tax bracket) and withdraw them after you are no longer working (and are in a lower tax bracket).
TLDR: Your RRSP is going to save you money on your taxes!
2. Down payment perks
Buying a home is a goal for many, and if you have an RRSP in Manitoba, you may be in luck. If you’re looking to buy your first home you can use up to $35,000 (or $70,000 per couple) of your RRSP as a loan towards your down payment. The best part, you won’t be taxed on the withdrawal. Keep in mind, you will need to pay back the money to your RRSP within 15 years and pay back a certain amount each year.
TLDR: Using your RRSP as down payment has its perks, but it’s best to weigh the pros and cons before you do so.
3. Term incentives
RRSPs can be locked into terms to earn more interest and can be an important part of any retirement savings plan. (Especially if you take advantage of Sunova’s rate special*) Earn 2.45% in a 17-month term or 2.60% in a 51-month term.
TLDR: RRSP + term deposit or rate special = $
Whether it’s sitting on the dock at the cottage with your feet dangling in the water, travelling the world, or spending time with family, getting an RRSP in Manitoba will help you have a relaxing retirement.
Finally, once your set up (pay us a visit if you’re not) contributing to your RRSP is super important. Even if you start small, it all adds up by the time you’re ready to retire.