Investing accounts

What is an RRSP?

A Registered Retirement Savings Plan (RRSP) is registered by the federal government and is designed for retirement savings – they're your retirement savings buddy! Contributions made to a RRSP can reduce the amount of income tax you pay for that year. Plus, any money you earn within your RRSP doesn't get taxed. When you withdraw your savings in retirement, you will pay tax on them, however, you'll likely be in a lower tax bracket and taxes won't be as much for you. It's like a little tax break today, setting you up for your future. 

Some of the investment products you can incorporate into your RRSP portfolio include bonds, mutual funds, guaranteed investment certificates (GICs) and exchange traded funds (ETFs). There's no limit to how many RRSPs you can have; however, there is a total contribution amount which is based on your annual income. This is set annually and will be your cumulative total for all of your accounts. 

RRSPs are designed to help you save for retirement. They offer tax benefits that encourage you to set money aside for your future. They're also beneficial when it comes to home ownership as you can use your RRSP contributions for the Home Buyers' Plan (HBP) if you're a first-time home buyer. In addition, RRSPs can also be used for the Lifelong Learning Plan (LLP) which finances your education or your spouse or common-law partner.

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Why choose an RRSP?

In it for the long haul

RRSPs are great for long-term retirement savings.

RRSPs are great for long-term retirement savings – they're designed for extended retirement planning, enabling compounding of your investments over time. Over time, your investments grow faster because you're earning money on the money you've already earned.

Tax benefits

Contributions are tax-deductible, reducing your taxable income.

Contributions are tax-deductible, which in turn reduces your taxable income (who doesn't love less tax?). Any gains within your RRSP are tax-deferred and withdrawals are typically taxed at a lower rate in retirement.

Diversity

A wide range of investment products, all in one account.

You have investment options when it comes to RRSPs, allowing for a wide range of products. From stocks to bonds to mutual funds and ETFs, a diversified portfolio can be yours.

Is this right for you?

Right for you if:

  • You have long-term goals. An RRSP is great for planning your retirement, as the name suggests. By reinvesting your RRSP contributions and investment earnings over many years, you can benefit from compounding, where your earnings generate even more earnings, leading to exponential growth!
  • Have higher income levels. If you're in a higher income bracket, contributing to an RRSP can provide you with tax benefits since your contributions are deducted from your taxable income.
  • You're comfortable with market fluctuations. If you have a higher risk tolerance or can withstand short-term market volatility (prices fluctuate significantly), a RRSP could be for you.

May not be right for you if you: 

  • Short-term financial objectives are your goal. If you have immediate financial goals like purchasing a home or covering short-term expenses, this isn't for you. Consider a Tax-Free Savings Account (TFSA) or term deposit instead.
  • You have lower income levels. If you're in a lower tax bracket, tax benefits may not be as beneficial to you. Consider a TFSA instead.
  • You have limited contribution room. If you've maxed out your contribution room, or you're nearing your limit, it's recommended you look at other investment tools.
Tools and resources

Tools to help you reach your goals.

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RRSP rates

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FAQs

Common questions.

Here’s what people ask us the most.

Your annual RRSP contribution limit is set by the Canada Revenue Agency (CRA). Generally, you can contribute up to 18% of your previous year’s earned income, up to the annual maximum limit set by the CRA. Your available contribution room can also include unused room from previous years. For more information, visit https://www.canada.ca/.

RRSP contributions can be made throughout the year. Contributions made during the first 60 days of the year may be eligible to be claimed on your previous year’s tax return.

Your available RRSP contribution room can be found on your latest Notice of Assessment from the CRA or through your CRA My Account.

Yes. If you don’t contribute the full amount available to you in a year, your unused RRSP contribution room carries forward and can be used in future years when it makes sense for you.

Yes, you can withdraw money from an RRSP before retirement, but withdrawals are generally considered taxable income. Some programs, like the Home Buyers’ Plan, may allow eligible Canadians to withdraw funds for specific purposes without immediate tax consequences if repayment requirements are met.

Have questions?

We're here to help.

Not sure which investment option is right for you? Our advisors can help you understand your choices, explore different options and create a plan that fits your goals and financial situation.

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*Contribution limits are based on CRA rules.

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