Tax benefits
As with personal RRSPs, the Concordia Group RSP offers tax benefits on 2 levels:
Immediate tax relief
The contributions are tax-deductible, subject to the limit set by law. Plus, through payroll deduction, the tax deduction is immediate. Here is an example:
| Assumptions | ||
| Salary Marginal tax rate (estimate) Annual contribution (6.5%) |
$30,000.00 40% $1,950.00 |
$70,000.00 50% $4,550.00 |
| Your actual disbursement per pay (every 2 weeks) | ||
| Contributions Less: tax savings New disbursement/cost |
$75.00 $30.00 $45.00 |
$175.00 $87.50 $87.50 |
Tax-sheltered growth
Earnings on your investment are not taxed as long as they remain in your RRSP. As a result, your retirement savings grow a lot faster in an RRSP than in any taxable investment.
