Registered Retirement Savings Plan (RRSP)

What is an RRSP?

An RRSP can help you create a retirement nest egg

An RRSP is a registered investment account that lets you save for your retirement by deferring taxes on your investment earnings. This means more of your money can stay invested and grow faster.

An RRSP also helps you lower your tax bill today, by allowing you to deduct RRSP contributions from your taxable income. By the time you retire you will likely be in a lower tax bracket, so withdrawals are taxed at a lower rate than today.

How RRSP work?

  • Talk to an advisor to open an RRSP with the right investments depending on your retirement goals and your risk tolerance.
  • Figure out the contributions that fit your situation, making sure you don’t go over your contribution room.
  • Your annual contributions can be deducted from your taxable income, thereby reducing your overall tax bill.
  • Any investment growth grows tax free.
  • You can access money when you need it, but withdrawals are taxable.
  • Alternatively, you can withdraw tax-free to buy your first home or for you or your spouse’s education, if you qualify.
  • When you’re ready to retire or you turn 71, your RRSP converts to a RRIF where you must withdraw your minimum annual amount. Alternatively, you can purchase an income annuity.

Where to open an RRSP account?

Most financial institutions can open a RRSP account. For example: banks, credit unions, trust and loan companies, insurance companies.

Types of RRSP Accounts

Individual RRSPs are registered in the individual’s own name.

A Spousal RRSP is registered in the name of your spouse or common-law partner. Your spouse or partner owns the account, but you can contribute money to it. The contributions made to the account can be used for your own tax deductions and count towards your own RRSP contribution limit for the year. However, these contributions will not affect the RRSP contribution limit of your spouse or partner.

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A Group RRSP is typically a benefit provided by an employer to employees. A Group RRSP usually consists of two components: the first component is a portion deducted directly from the employee’s salary, for example, 5%, which is deposited directly into the Group RRSP account. The second component is the employer’s contribution to the Group RRSP on behalf of the employee, typically a certain percentage, such as an amount equivalent to 5% of the employee’s salary, which represents the employer’s matching contribution. The total of these two contributions is considered the employee’s RRSP contribution for the year.

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A locked-in retirement account (LIRA) is a Canadian registered account designed to hold and invest pension assets that you and your former employers contributed to. Investment income within the LIRA is tax-deferred – this means you won’t have to pay income tax until you withdraw funds.

Assets within a LIRA are “locked in,” which means you generally can’t make any withdrawals until you reach a specific age. The “locked in” rules of a LIRA are meant to restrict your access to your pension assets. These restrictions are similar to the ones that would’ve applied had you left the assets in your former employer’s pension plan. The specific “locked in” rules are determined by applicable federal, provincial, and territorial pension legislation.

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Open an account with as little as $50.

You don’t need to wait until having a lot of money to start investing. The key to investing is to “start,” not to “prepare.”

RRSP Contribution Limit

The annual RRSP contribute limit for each of the years from 2018 to 2024 are:

Year Limit
$ 26,230
$ 26,500
$ 27,230
$ 27,830
$ 29,210
$ 30,780
$ 31,560

As a government-registered CRA account, RRSP, like other registered accounts, has contribution limits.

  • The RRSP contribution limit for each individual in the current year is 18% of the previous year’s income or the maximum RRSP limit for the current year, whichever is lower. (The RRSP contribution limit for the year 2023 is 18% of the income earned in 2022 or $30,780, whichever is lower.) This limit includes any unused contribution room from previous years and is reduced by pension adjustments. You can check your remaining RRSP contribution room for each year by logging into the CRA website.
  • If your contributions exceed the annual maximum contribution limit, the excess amount will be subject to a penalty of 1% per month.
  • If your income has increased compared to the previous year, your contribution limit for the next year will also increase. However, it will still not exceed the maximum limit set by the CRA.
  • Indeed, RRSP contributions are subject to a time limit as well. While you can purchase RRSPs at any time during the year, only those purchased within the first 90 days of the following year allow you to claim an income tax deduction for the previous year. This means that contributions made before March 1st qualify for the deduction. It’s advisable to make contributions by this date.

What types of products can be held in a RRSP?

A RRSP account can hold various income-generating investment products, depending on investment objectives and risk preferences.

For example: cash, Guaranteed Investment Certificates (GICs), bonds, mutual funds, Segregated Funds, exchange-traded funds (ETFs), and stocks.

Withdrawals and Account Transfers for RRSP

RRSP accounts allow withdrawals at any time, and the withdrawn amount is considered income for the year and taxed accordingly.

It is important to note that once RRSP contribution room has been used, it cannot be reused, except for the First-Time Home Buyer’s Plan (HBP) and the Life-Time Learning Plan (LLP).

Ai Financial services on RRSP

Your One-Stop Shop for Segregated Funds

We open accounts for clients in financial institutions such as iA and Manulife and invest in segregated funds; we can also help clients transfer the funds required for RRSP from other institutions (according to different needs).

For more information about investing with RRSP, please visit Invest with RRSP.

If you are temporarily short on cash and can’t contribute to your registered retirement savings plan (RRSP), an RRSP loan may be just the thing for you. In fact, the money you receive from your tax return and investments might even cover the cost of the loan.

This way, you can continue to contribute to your RRSP or increase your contributions, no matter your financial situation. What’s more, if you use your tax return towards payment of your loan balance, the loan will be repaid more quickly.


Although you can take money from your RRSP before you retire, it’s not recommended because of the negative impact on your retirement plan due to taxes on withdrawals. Withdrawals must be declared as income on your tax return at the end of the year and withholding tax will also be deducted from the amount you withdraw.

If you decide you would like to withdraw from your RRSP, we encourage you to first use our online booking tool to schedule a time to speak with an advisor by phone.

  1. When an RRSP account holder passes away, the entire funds in their RRSP must be included in their income for the year of death.

  2. If a beneficiary is designated, the fair market value of all the assets in the RRSP will be passed on to the beneficiary.

  3. In certain qualifying circumstances, eligible beneficiaries (such as a spouse) may be able to transfer these funds into their own registered plan on a tax-deferred basis, subject to specific conditions.

The RRSP contribution deadline each year is the last day of February, which falls on the final Sunday of the month (or extended to early March).

We open accounts for clients at major financial institutions or assist with account transfers. We select Segregated Funds for clients and use RRSPs for investments.

Through long-term investing and the power of compounding, we help clients achieve substantial investment returns by retirement. Additionally, we can apply for RRSP loans on behalf of clients to take advantage of tax benefits and investment opportunities.


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