What is the primary purpose of an RRSP (Registered Retirement Savings Plan) in Canada?a) To save for a child’s education b) To provide a tax-sheltered account for retirement savings c) To invest in real estate d) To save for a vacation
Question
What is the primary purpose of an RRSP (Registered Retirement Savings Plan) in Canada?a) To save for a child’s education b) To provide a tax-sheltered account for retirement savings c) To invest in real estate d) To save for a vacation
Solution
The primary purpose of an RRSP (Registered Retirement Savings Plan) in Canada is b) To provide a tax-sheltered account for retirement savings. This plan is designed to encourage Canadians to save for their retirement. The contributions made to an RRSP are tax-deductible, meaning they can be used to reduce your tax. The income earned in the RRSP is usually exempt from tax as long as the funds remain in the plan.
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