1) Contributions are tax deductible
2) You should reinvest the tax savings
3) Once funds are in an RRSP you should then invest the money appropriately
4) Investments grow tax sheltered
5) Redemptions are fully taxable as income
6) Redemptions should only be made when you’re in a lower tax bracket than when contributions were made
7) RRSP assets can be used towards pension buybacks
8) RRSP assets can be used for first-time home purchases through the Home Buyers Plan
9) RRSP assets can be used to fund a post-secondary education through the Life-Long Learning Plan
10) There will be people who don’t understand RRSPs that say they are a scam because you pay tax at the end. That’s the whole point. Deferring taxes until a time when you are in a lower tax bracket and allowing tax sheltered compounding to occur.
