Three Reasons Your Employees Should Consider RRSPs

It’s the start of a new year and that time when many review their finances, prepare their taxes, and make their final registered retirement savings plan (RRSP) contributions.  If you have employees who aren’t taking advantage of RRSPs, here are three reasons you can share with them to consider taking advantage of this financial opportunity.



1) They’re tax deductible

Tax-deductible contributions mean you’ll have more of your income available for your current needs, even while you’re saving for the future. 

2) Tax on investment growth is deferred

Tax-deferred investment growth means you don’t pay any tax on the money you contribute to your RRSP. This allows you to keep your money working for you longer.

It’s true that the money in your RRSP will eventually be taxed when you withdraw it; however, because most people earn less income in their retirement years, those funds should be taxed at a lower rate upon withdrawal.

3) Your contributions grow tax-free

Another major benefit of RRSPs is that they allow your contributions to grow tax-free. This means you don’t have to pay capital gains taxes when you sell stocks or funds at a profit, and you don’t have to pay tax on dividends or interest you receive in cash.


Any RRSP contributions made in the first 60 days of a calendar year can be used to offset income for the current year they are deposited or to offset income for the previous year. The deadline to contribute to your RRSP for the 2016 tax year is March 1, 2017*. Don’t miss the opportunity to minimize your income tax owed for 2016 and to boost your retirement savings. 

Do you offer a Pension or RRSP matching program?
If you offer your employees an incentive program for contributions made to a group pension plan or RRSP, take the time to ensure they know all the details of this added benefit toward their financial future. It could make all the difference in relieving major financial stress.

*It’s the responsibility of each individual contributor to stay within Canada Revenue Agency (CRA) limits when contributing to their RRSP. Individuals should refer to the Notice of Assessment they received from the CRA to confirm their RRSP limits.