16 years experience of Insurance solutions.
In Canada, the associate account into that an employee makes contributions up to a particular limit throughout his/her operating life, and from that he/she begins to require distributions following retirement. Registered retirement savings set up permits for tax-deductible contributions and nonexempt distributions; that’s, contributions are tax-deferred till retirement. Registered retirement savings plans is also invested with insecurities and frequently own common shares and certificates of deposit.
An individual RRSP is an account that is registered in your name which is called an account holder. With Individual RRSPs, the account holder is also called a contributor, as only they contribute money to their RRSP.
A spousal RRSP is registered in the name of your spouse or common-law partner. A Spousal RRSP allows a higher earner, called a spousal contributor, They own the investments in the RRS, but you contribute to it. In this case, it is the spouse who is the account holder. The spouse can withdraw the funds, subject to tax, after a holding period. A spousal RRSP is a means of splitting income in retirement: By dividing investment properties between both spouses each spouse will receive half the income, and thus the marginal tax rate will be lower than if one spouse earned all of the income.
Some employers offer group RRSPs as an advantage to help employees save for retirement. In a Group RRSP, an employer arranges for employees to make contributions, as they wish, through a schedule of regular payroll deductions. The employee can decide the size of contribution per year and the employer will deduct an amount accordingly and submit it to the investment manager selected to administer the group account.