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How do I plan for retirement?
Canadians are living more active lifestyles in retirement and an RSP can be an important part of your overall retirement plan, helping you to maintain your standard of living when you retire. In addition to this, saving in an RSP can reduce your annual taxable income by the amount of the eligible contribution because RSP contributions decrease your gross taxable income. Calculate approximately how much you would need to save for retirement.
You can accumulate retirement savings in your RSP up to December 31st of the year you turn 71, at which time it must either be converted into an approved form of retirement income such as a Retirement Income Fund (RIF), or withdrawn in cash. If you withdraw cash, you must pay income tax on the amount in the year it is withdrawn. If you wish to avoid this, it's important to arrange for the purchase of a RIF or a life annuity with your RSP funds prior to December 31st of the year you turn 71. For more information, please visit government regulations & tax considerations for your retirement income funds.
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