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First of all if you make less than 35,000 a year you should not be contributing to an RSP. You should consider contributing to a TFSA. In the long run you will be better off. RSP accounts are face with negative taxation at withdrawal. The products such as stocks and mutual funds invested inside the account are considered capital gains and 50% taxable. When you withdraw these products from an RSP account they are considred income and 100% taxable. The tax refund you receive from a RSP contribution is dependent on your income level. If you are in the lowest tax bracket there is no future spread to gain from deposit to withdrawal. People earning more than $120,000 will receive a 43% tax refund and then at retirement if they withdraw at the lowest bracket will pay 20% in taxes. That provides them with a 23% spread in addition to tax deferrment of investment growth.
I am a licensed financial planner and this is a professional opinion.
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