Savings plan refers to the various types of retirement savings plans that are available to the retired individuals. Savings plan is a useful device of savings for future application. Different types of savings plan include stock savings plan, thrift savings plan, registered retirement savings plan or RRSP and many others. Savings plans help retired individuals get a steady flow of income after their retirement.
The savings plans can be categorized into the following types:
Thrift Savings Plan: In the United States, the Thrift Savings Plan is also known as the Federal Thrift Savings Plan or simply TSP. This is a retirement savings plan for U.S. civilians and armed forces personnel. It is a defined contribution plan, which is managed by the Federal Retirement Thrift Investment Board. The Thrift Savings Plans do have some similarities with the 401(k) plans. The different types of funds that are available under the TSP include C Fund, F Fund, G Fund, I Fund, and S Fund.
- Stock Savings Plan: The stock savings plan offers the taxpayers the option to save a substantial amount of money if they invest in IPOs of particular companies because in this way, they can receive a number of tax deductions. This kind of plans are usually seen in Canada.
- RESP or Registered Education Savings Plan: It is a form of savings account that is utilized by the parents for the purpose of saving for tertiary education for their children in Canada. The main benefits of RESP are tax benefits and the availability of CESG or Canada Education Savings Grant.
- Registered Retirement Savings Plan (RRSP): A RRSP or Registered Retirement Savings Plan is a type of account, which offers tax advantages for retirement savings in Canada. RRSPs can be broadly categorized into two types, Individual RRSP and Spousal RRSP. Basically, they are tax-deferred investments. The account structures available for RRSP include the following: nominee accounts, client-held accounts and intermediary accounts.
- Self Directed RRSP: A Self Directed RRSP or SDRSP is a particular form of nominee account under the RRSP or Registered Retirement Savings Plan in Canada.
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