Registered Retirement Savings Plan (RRSP)
An RRSP is an account that can help you save for retirement. Contributions into your RRSP are tax-deductable. In addition, you don’t pay taxes on any income earned within the account.

You can withdraw funds from the account at any time. But, you are taxed on money that’s withdrawn. However once you retire, you generally have less income, so you pay less tax on the money you
take out.

Contributions
The amount you can contribute into your RRSP is generally calculated as 18% of your earned income from the previous tax year up to a maximum of $21,000 (for 2009) minus any “pension adjustment”. Any unused contribution room can be carried forward.

Your Notice of (Re)Assessment from the Canada Revenue Agency will also specify the contribution amount eligible.

Any RRSP contributions you make within the first 60 days of the calendar year are reported on the previous year's tax return. Your contributions may also be used as deduction for the previous tax year. Any contributions you do after the first 60 days are reported for the current tax year.

Withdrawing Funds
Before the end of the year of your 71st birthday, your RRSP account must be cashed out or transferred to a Registered Retirement Income Fund (RRIF) or an

annuity. Within an RRIF, your investment can continue to grow tax free. But you will be required to withdraw funds from the account every year which is taxable.

While the primary purpose of your RRSP is to help you save for retirement, funds in the account can also be used for the Home Buyer's Plan (HBP) and Lifelong Learning Plan (LLP).

The HBP allows you to use RRSP funds to help purchase your first home. You can borrow up to $25,000, tax-free (and another $25,000 from a spousal RRSP) starting January 27, 2009. After the second year the funds are withdrawn, you are required to repay the loan within 15 years. Also, you must repay a portion of the loan every year.

The LLP lets you borrow from your RRSP to fund your post-secondary education. You can withdraw up to $10,000 per year to a maximum of $20,000. You will need to begin repaying the loan 60 days after the fifth year following your first withdrawal or the second year after the last year you were enrolled in full-time studies, which ever comes first.

	Investment Tax-free Savings Account Registered Educations Savings Plan Registered Income Fund

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