Then here’s an explanation.
Individual RRSP —Account is registered in the name of the (individual) contributor.
Self-directed RRSP —If you are a do-it-yourself investor, then go for self-directed plan. It can hold a wide range of investments together in one plan. Annual trustee fees of up to $150 are often waived for those with at least $25,000 in plan assets, but transaction costs are the holder’s responsibility.
With a self-directed RRSP, you can put money into a wide variety of investments — all inside a single plan.
These can include guaranteed investment certificates (GICs), mutual funds, government and corporate bonds, exchange-traded funds (which can track market benchmarks like the S&P/TSX 60 composite index), mortgage-backed securities, gold and silver bullion and stocks. You can even invest in your own mortgage.
You can even just stick your cash in an interest-bearing account while you figure out what to do.
Group RRSP — These are set up at work. The employee and/or the employer contribute money to individual RRSP accounts. Contributions are deducted from pay cheques so the tax savings are immediate. Investment choices may be limited.
Spousal RRSP — With spousal RRSPs, the higher-income spouse makes a contribution to the other spouse’s RRSP. The contributor gets the tax deduction, but the money is now owned by the other spouse. So when the money is withdrawn from the spousal RRSP, it’s taxed at the lower-income spouse’s rate. This is a form of income-splitting that is especially useful when one spouse has a significantly higher retirement income than the other.
You can carry forward indefinitely unused RRSP contribution room.
To know your RRSP contribution room, just check the Notice of Assessment you received from the Canada Revenue Agency last year, or phone the tax department’s T.I.P.S. line at 1-800-267-6999
CRA representative will ask you to provide your social insurance number, your month and year of birth, and the total income you reported on line 150 of your 2010 return: so keep those information ready
There’s no minimum age to set up an RRSP
You can continue to contribute to an RRSP until the end of the year in which you turn 71, provided you still have earned income (or the end of the year in which your spouse turns 71 in the case of spousal plans).
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