A Registered Retirement Savings Plan (RRSP) in Canada is a personal retirement savings account that you set up and register, and to which you or your spouse or common-law partner can contribute. Contributions made to an Registered Retirement Savings Plan (RRSP) in Canada are deductible, meaning they can lower your taxable income.
Income earned within the Registered Retirement Savings Plan is typically tax-sheltered as long as it remains in the plan. However, taxes are usually payable when you withdraw funds from a Registered Retirement Savings Plan in Canada. RRSPs offer a tax-efficient way to save for retirement while providing potential tax savings during your working years.
An RRSP is designed to help Canadians save money for retirement while reducing income taxes during their working years. It rewards you now for planning ahead.
You, your spouse, or common-law partner can contribute to an RRSP. Contributions are made with pre-tax dollars, and they’re tax-deductible, which means you can lower your taxable income for the year.
All the money you earn inside your Registered Retirement Savings Plan in Canada—whether it’s interest, dividends, or capital gains—is sheltered from tax as long as it stays in the plan. That means faster growth over time.
RRSP withdrawals are counted as income in the year you take them out. But most people withdraw in retirement, when they’re in a lower tax bracket, so they pay less tax overall.
Your annual contribution limit is based on your income and is updated each year by the Canadian government. Didn’t max out your Registered Retirement Savings Plan in Canada last year? Good news—you can carry forward the unused room.
Your RRSP can hold many types of investments—stocks, bonds, mutual funds, GICs, ETFs, and more. You have the freedom to build a retirement portfolio that fits your goals and risk tolerance.
A spousal RRSP lets a higher-earning spouse contribute to their partner’s Registered Retirement Savings Plan in Canada. This can help balance retirement income between both spouses and reduce taxes in retirement.
Thinking of buying your first home? Under the Home Buyers’ Plan (HBP), you can withdraw up to $35,000 from your RRSP tax-free to put toward your down payment. You’ll just need to repay it gradually over 15 years.
RRSPs aren’t just for early retirement planning. You can continue to contribute up until the end of the year you turn 71, helping you save consistently over your lifetime.
Everyone’s financial goals are different. To get the most out of your RRSP, it’s smart to work with a financial advisor who can help you create a strategy tailored to your life, income, and retirement dreams.
