Registered Retirement Savings Plan (RRSP)
A Smart Way To Save For Your Future
The Registered Retirement Savings Plan (RRSP) is a personal savings plan registered with the Canada Revenue Agency (CRA). It allows you to save for retirement on a tax-sheltered basis, helping your investments grow faster over time.
Who should invest in an RRSP?
Canadians under 71 with earned income who want to save for retirement and reduce their taxes.
Anyone focused on long-term retirement planning and building financial security.
First-time homebuyers or those looking to fund their education or career development.
Contributing to an RRSP
There is no minimum age to contribute, but you must have earned income and file a tax return to be eligible.
You can contribute up to 18% of your previous year’s earned income, up to an annual limit set by the federal government.
Contributions are tax-deductible and claimed on your tax return.
Unused contribution room can be carried forward to future years, which is especially beneficial if your income increases.
Your annual deduction limit can be found in your CRA My Account or on your most recent Notice of Assessment.
Over-contributing can result in penalties, so it’s important to track your limits carefully.
Simple to start, flexible to use, open your RRSP and invest on your schedule.
Tax free growth
Investment gains inside an RRSP are not taxed as long as they remain in the plan.
Tax-sheltered growth means your savings can compound more quickly.
Generate stable retirement income
You can contribute to your RRSP until December 31 of the year you turn 71.
At retirement, convert your RRSP into a Registered Retirement Income Fund (RRIF) or annuity to receive regular income.
RRIF withdrawals are taxable, but you may be in a lower tax bracket during retirement.
Spousal RRSP benefits
Contributing to a Spousal RRSP allows you to split retirement income with your partner.
This income-splitting strategy can reduce your overall household tax burden, especially if one spouse earns significantly more.
Withdrawing from an RRSP
You can withdraw funds anytime, but the amount withdrawn is considered taxable income.
Your financial institution must withhold 10% to 30% at the time of withdrawal, depending on the amount.
Certain withdrawals can be made tax-free if repaid within specific timeframes, including:
Home Buyers’ Plan (HBP): Withdraw funds for your first home purchase.
Lifelong Learning Plan (LLP): Withdraw funds to pay for education or training.
How to invest inside an RRSP
RRSP accounts can hold a variety of investments, including cash, GICs, mutual funds, ETFs and stocks.
Choose investments based on your risk tolerance, financial goals, and investment timeline.
A personalized financial plan can help guide your RRSP investment strategy.
Thinking about opening an RRSP or need to optimize your current savings? Contact us today, we’ll help you build a plan that works for your life with a personalized financial strategy that aligns with your goals.
TL;DR:
A Registered Retirement Savings Plan (RRSP) helps Canadians grow their retirement savings tax-free. Contributions are tax-deductible, investments grow tax-sheltered, and the plan supports long-term goals like buying a first home or funding education.
Key Benefits:
Save on taxes now, grow your money faster.
Contribution limit: 18% of prior year's income (up to annual max).
Unused room carries forward; over-contributions can be penalized.
Withdraw anytime (taxed), or tax-free under the Home Buyers’ Plan or Lifelong Learning Plan (if repaid).
At retirement, convert to a RRIF or annuity to receive income.
Spousal RRSPs enable income splitting to reduce tax burden.
Who it's for: Canadians under 71 saving for retirement, a first home, or further education.
How to invest: Choose from GICs, mutual funds, ETFs, stocks, etc., based on your goals and risk tolerance.
Pro tip: A tailored plan maximizes your RRSP’s potential, get expert advice to align your strategy with your goals.
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