Knowing your RRSP options

Retirement. The word holds so much promise. You have worked hard for years and now you are finally able to stop working 9 to 5 and spend your days as you please. Do you imagine yourself traveling? Spending time with family, finding new hobbies, or picking up old ones that you never seemed to have time for? The world is your oyster. But have you stopped to think, where is the money coming from? 

Have you done all you could to set yourself up for a comfortable retirement?  

Whether retirement is just over the horizon or a distant thought, we have options for you. We are here to help at every stage of life, helping you get set up for the future you want.  It’s never too early to start saving! 

What is an RRSP? 

An RRSP is a Registered Retirement Savings Plan initiated with the Government of Canada. Contributions and interest earned are tax exempt, as long as they stay in the plan.  

There is no minimum age for opening an RRSP. As long as you are a Canadian citizen with an income and file your tax returns, you can contribute. However, RRSPs must be collapsed by age 71. 

Any early withdrawals (before retirement) will be subject to a withholding tax, which is taken by NBCU at the time of withdrawal and paid directly to the government on your behalf. There are exceptions to this if you are going back to school or purchasing your first home.  

Know your contribution limits 

You are responsible for knowing your RRSP contribution limits. Your allowable RRSP contribution for the 2021 tax-year is the lower of 18% of your earned income from the previous year, or $27,830.  

Be careful not to go over your limit! If you over-contribute by more than $2,000.00 you will be taxed, and the government will charge you 1% for each month you are over your limit.  

Your options with NBCU 

  • Individual, spousal or common-law partner RRSPs. 
  • High interest savings – funds remain accessible and make saving easy by setting up a scheduled automatic transfer into your RRSP. 
  • Term deposits – invest your money for a term of 1 -5 years. 

Current RRSP Promotion at Northern Birch Credit Union 

Earn 3.00% interest for 90 days when you make an RRSP contribution into the promotion before the 2021 RRSP deadline: end-of-day March 1st, 2022. 

  • This is a short-term 90 Day GIC with a 3.00% annual interest rate  
  • Minimum deposit is $100  
  • After 90 days, upon maturity, you can decide what you want to do with the contribution. Choices include variable RRSP, GIC’s, or investing with one of our partners above to avoid transfer-out fees.
  • Income earned is tax sheltered 

Reduce your taxable income while saving for your retirement and earning a high interest rate! Earn money faster and accumulate investment returns tax-free. 100% of RSP earnings can be compounded and re-invested, which increases your savings rapidly over the years. 

Until March 1st, we will cover some of the transfer-in costs for our members when they transfer their RRSP over to us.  

  • $25 for up to $24,999  
  • $50 for $25,000 to $99,999  
  • $100 for $100,000 and above   

To proceed with a transfer-in, we will need a statement of the registered account at your other financial institution. Once we have you sign the transfer form, we’ll take care of the rest! 

The reimbursement of the transfer fee will be deposited to your chequing or savings account after the transfer-in is completed.  

Get in touch with our team today to get started!  


*Mutual funds are offered through Credential Asset Management Inc. Online brokerage services are offered through Qtrade Direct Investing, a division of Credential Qtrade Securities. VirtualWealth is a trade name of Credential Qtrade Securities Inc.

Author: NorthernBirchCU

A co-operative financial institution based out of Toronto, Ontario.

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