RRSP
What Is RRSP?
A Registered Retirement Savings Plan (RRSP) is a retirement plan that offers a dual benefit: your contributions provide a tax deduction, while your investment income grows in a tax shelter.
How much can I contribute to my RRSP?
The amount you can contribute to your RRSP is generally up to 18% of your earned income from the previous year, up to a maximum annual limit set by the government.
What is the RRSP contribution deadline?
The RRSP contribution deadline is typically March 1 of the following year for contributions intended to reduce taxable income for the previous tax year. For example, to contribute for the 2024 tax year, the deadline is March 3, 2025.
Key features of the RRSP
Contributions made to an RRSP are deducted from taxable annual income, potentially resulting in a tax refund.
Contributions can be made to a spouse’s RRSP to reduce taxable income and benefit from tax savings.
RRSP assets are allowed to grow tax-deferred until withdrawal, which is fully taxable.
RRSP funds can be withdrawn tax-free under the Home Buyers’ Plan to assist first-time home buyers.
Unused contribution limits can be carried forward to future years.
Your RRSP must be converted into a registered retirement income fund (RRIF) by December 31 of the year when you turn 71.