Why Are R.R.S.P.’s Important?

This is an outline I used to explain the features and benefits of RRSPs

Using averages of a $30,000 income, flat lined (not allowing for inflation)

Government allowing tax deferral of 20% ( actual 18% of previous years income)

Investment growth rate (average 6%)

Income $30,000 taxable 20% = $6,000 tax you keep $24,000

If you purchased RRSP 20%=$6000.00 = 20% tax deferral=  $1,200.00

Gross Income $30,000 minus $6,000 RRSP, tax payable(6000-1,200) $4,800 leaves you with net income of $19,200

Projecting saving of $500.00 monthly at 6% for 30 years= $340,000

Total invested 25x $6,000=$150,000 of which you contributed 25 x$4,800= $120,000

and the tax deferral  25 X$1,200= $30,000    so combined tax deferred growth is (340-150)= $190,000


About vfxinsider

This is a group blog of vfx artists working in Vancouver. Inspired by vfxsoldier we decided to take a stand and speak out about the great imbalance of power that exists between the employer studios and individual vfx artists. We are tired of keeping quiet while the vfx studios come up with ever more creative payment schemes to reduce their production costs at our expense while openly violating BC labor laws.
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