Registered Retirement Savings Plan (RRSP)

The savings account that keeps on giving

An RRSP provides you with tax savings today, helps with your first home and tax shelters your money so you can save more and retire more comfortably tomorrow.

Pay less in taxes today

The RRSP lowers your taxable income allowing you to save more for your retirement.

Keep more of your money

Let your investment grow tax-free today until you withdraw it at retirement. Usually at a lower tax rate.

Use it to help pay for your first home

Use the money you’ve saved in your RRSP not only to save in income taxes, but also to help pay for your first home through the Home Buyers Plan. 

What is an RRSP?

  • Speak with an advisor about opening an RRSP and helping you choose the right investments for you.
  • Find the right contribution room that is balanced between your retirement planning and current goals.
  • Learn about how your contributions in your RRSP can reduce your overall income taxes.
  • Take advantage of your investment growth without worrying about taxes.
  • Access the money when buying your first home through the home buyers plan (HBP).
  • When you retire or the year you turn 71, your RRSP turns into a registered retirement income fund (RRIF). At this stage, you can begin withdrawing your minimum annual amount or you can look into converting it into an income annuity.
    Learn more about RRIF  >

Every year you can contribute a limited amount towards your RRSP. This amount usually appears on your annual notice of assessment or you can get more information by logging into the Canada Revenue Agency website. If you missed a year, the contribution room is usually carried forward.


The contribution room is calculated by the CRA with these three set criterias in mind:

  • Either 18% of your earned income reported on last years tax return or $27,830 (2021’s annual limit)
  • Your total unused deduction room from the previous year
  • Make sure to subtract any pension deductions from the previous if necessary

You will owe 1% per month in taxes on any excess contributions greater than $2,000. If you do not pay these additional taxes within the 90 days after the calendar year, you’ll face more penalties and interest charges.

An RRSP gives you advantages both in the short-term and in the long-term.


Advantages in the short-term

By contributing to your RRSP, you’re not only planning for your retirement, but also reducing your taxable income. For example, if you had an annual salary of $75,000 and decided to maximize your RRSP contribution for that year, you’d contribute $13,500. When it comes time to pay your income taxes, the CRA will only tax on the  $61,500.


Advantages in the long-term

In addition to saving on your income taxes today, you’re also allowing your investment to grow and compound without paying investment earnings tax. You’ll only pay personal income taxes when you withdraw the money in retirement, usually in a lower tax bracket.


General rules governing your RRSP contributions

There are two RRSP contribution rules:


  1. Dec. 31 of the year you turn age 71, you can no longer contribute to your RRSP.
  2. You can contribute up to a maximum of what the CRA allows, otherwise there will be penalties.


You can be sure that speaking with one of our advisors, you’ll get all the information you need to make the most informed decision about investing in a mutual fund or segregated fund policy.


Contribution deadline

The deadline to contribute to you or your spouse’s RRSP is March 1st, of every year. You can choose to claim the deduction for that year or the year prior, whatever makes more financial sense to you.

Nothing can stop you from withdrawing from your RRSP, but there are a few things to consider if you do:


Set your retirement goals back

The timeline of your retirement plans may be prolonged and the long-term impact it can have on your savings can be greatly impacted.


Have to pay taxes right away

There will be withholding taxes applied (the amount withheld depends on how much you take out) and the amount withdrawn will be added to your income that year. 


Lose your contribution room

You will permanently lose the contribution room if you withdraw from your RRSP.

You can withdraw money from your RRSP when you buy your first home through the Home buyers plan.


Both you and your spouse can withdraw up to $35,000 each from your RRSPs and take advantage of the home buyers plan. To qualify, the RRSP funds you’re using must be deposited for at least 90 days in your account. You must re-contribute the amount that was withdrawn for the down payment within 15 years, otherwise you will be taxed on it. The repayment usually begins 2 years after the calendar year of the withdrawal.

A group RRSP is a savings plan usually offered by your employer. It’s similar to a regular RRSP, but adds the benefit of allowing you to have savings deducted from your paychecks, making it for more routine savings. Sometimes, matching contributions from your employer are offered as well.

When can you start investing in one?
When you turn 18 years old, reside in Canada and have a valid Canadian SIN.
When you’ve declared an income and filed your income taxes in the year before.
How long does the account stay open?
Dec 31 of the year you turn age 71, then rolls-over to RRIF

For life

When is the contribution deadline?
March 1st of 2022. You can decide which year you’d like to apply the taxable benefit. You can choose between 2021 and 2022.
There isn't one.
What’s the contribution room?
The lesser amount of 18% of your earned income last year or 2021’s annual limit of $27,830 plus any unused carry-forward contribution room, less any pension adjustments
$6,000 for 2022, plus any withdrawals in a previous year and any unused contribution room carried forward from the previous year
Can you withdraw your money whenever you want?
The contribution room is permanently lost.
The contribution room is never lost. It’s just added to the following year.
What are the taxable benefits?
Your investment income is tax sheltered and your taxes on income is deferred for when you retire. Money you withdraw is taxed at your marginal tax rate, which is usually lower when you’re retired.
Contribution will not reduce your taxable income. However, your money is easy to access, and 100% tax sheltered, meaning you won’t pay any taxes on income/profits earned from your investments.

We can help you start saving and investing today.

Our team can answer all your questions, understand your situation and help you build a plan.