CPP question

[trent]

RRSP and CPP are completely different things. RRSP stands for Registered Retirement Savings Plan, while CPP is Canada Pension Plan.

The RRSP allows you to put money aside for retirement and at the same time it gives you a tax break on your income tax. The money you contribute in your RRSP account are tax deductible up to certain level. The good thing is that the money in your RRSP can grow tax free until you start taking money out of the account. Contrary to popular believe, you can withdraw money from your RRSP account at any time even before you reach a retirement age, however when you withdraw you have to pay taxes on the money.

Almost every Canadian citizen older than 18 who earns a salary must contribute to Canada Pension Plan. The CPP contributions are split between you and your employer, and unfortunately self-employed Canadians are responsible for contributing the entire CPP amount.