When you’re self-employed, you often don’t have the luxury of a steady income, making it hard for you to put away money for your retirement. The Canada Revenue Agency offers several retirement savings plans to help you save for retirement.
The Canada Pension Plan is a mandatory retirement savings plan for all working Canadians. You contribute a percentage of your income to CPP and start collecting money from this pension plan when you reach 60.
The Registered Retirement Savings Plan is an optional retirement savings plan. When you contribute to RRSP, you not only save for retirement, but you also deduct the amount from your income and lower your income tax.
The Tax-Free Savings Account is also an optional savings plan that allows Canadians to save money. You don’t have to pay tax on the money you earn in your TFSA account, allowing you to grow your money tax-free.