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What is an RRSP? How do RRSPs affect my tax
return?
RRSP is a tax-deferral savings plan. When a taxpayer makes a
contribution to an RRSP, he or she is allowed to claim a deduction
based on the contribution limit. This deduction is shown on Line 208
of the tax return. Funds accumulate tax-free in the plan but this
tax-free status does not last forever.
The age limit for contribution to RRSPs is 69. Taxpayers must make
arrangements to convert their RRSP funds to a RRIF or annuity by the
end of the year in which they turn 69, or else the full value of the
RRSP will be included in their income the following year.
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