Page 24 - A Canuck's Guide to Financial Literacy 2020

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Spousal Registered Savings Plan

Spousal Registered Retirement Savings Plan also known as a Spousal RRSP is a savings
account registered with the CRA for the purpose of saving for your spouse or common law
partner. Spousal RRSPs are similar to regular RRSPs and are known to be effectively used
when there is an income disparity between spouses.

Locked-in Retirement Account

A Locked-In Retirement Account also known as a LIRA is a registered retirement savings
account in which you would transfer your locked-in work pension into. If you are
participating in a pension plan at your current company, either a Defined Benefit Plan or
a Defined Contribution Plan, and quit the company, you will have the option to transfer your
pension into a LIRA or LRSP.

Life Income Fund

A Life Income Fund is a locked-in investment savings account that is designed to provide
retirement income. LIFs are considered an extension of Locked In Retirement Accounts as
the periodic payments that are generally paid out came to be from locked-in pension funds.
LIFs can be either provincial or federal depending on where the locked-in pension funds
originated from

Registered Disability Savings Plan

A RDSP is a registered investment account that aims to help families save on a tax deferred
basis for loved ones diagnosed with severe or prolonged disability. Introduced in December
2008, RDSPs have been well received and applauded by the international community as
Canada was the first country to introduce such type of account.

Deferred-Profit Sharing Plan

Deferred Profit-Sharing Plans (DPSP) are registered investment vehicles set up by the
employer for the benefit of the employees. The plan encourages employers to share the
business’s profits with employees by contributing into the DPSP on a periodic basis.
Employee contributions are not permitted. Contributions into DPSPs affect your RRSP
contribution room and have vesting requirements.

Retirement Compensation Arrangement

A Retirement Compensation Arrangement (RCA) is a pension plan where a custodian holds
funds contributed by an employer for the purpose of distributing it to the employee in