RRSP

Alright so seeing as how i mistakenly forgot to do the blog during my busy day last week i guess im doing it today.

On the day of Monday November 2/09 at approximately 2:30 pm we started learning about RRSP's. RRSP stands for Registered Retirement Savings Plan. Things you can invest in RRSP's include stocks, mutual funds, GIC's (guaranteed invesment certificates), Bonds, Canada Savings Bonds, Gold, and money market funds. Here is a couple of examples we did in class.


If John contributes (say $4000) to an RRSP he can reduce his taxable
income.
1 This means that instead of
paying tax on $40000, he
would pay tax on how
much?

$40000
- 4000
----------
$36000

Now instead of paying $8000 in tax, he pays less
tax, say $6000. He just saved himself $2000 in
tax. His new net pay is $36,000


1 So John invested $4000,
but it only really cost him
how much?

Cost $4000 Thousand
Saved $2000 Taxes
-----------------------
$2000