Registered Retirement Savings Plan

An RRSP is a Registered Retirement Savings Plan created by the Canadian government to help you save for your retirement in a tax-sheltered investment account. An RRSP can contain several types of investment tools; Guaranteed Investment Certificates (GIC’s), bonds, mutual funds, stocks and income Trust Units.

Unlike a traditional savings account, contributions to your registered plan are tax deductible and tax sheltered until the time of withdrawal. You can contribute to an RRSP if you have contribution room until the year of your 71st birthday.


IS RRSP right for me?

Most working individuals, who file an income tax return, should consider opening a RRSP since they offer numerous benefits:

  • RRSP contributions are tax deductible; individuals can reduce their annual tax bill by contributing to an RRSP.
  • In a situation where a spouse earns more income than their husband/wife, they can reduce their combined tax burden by utilizing a Spousal RRSP. Additionally, couples can use income splitting during retirement to help reduce their taxes when they withdraw their retirement funds.
  • For many Canadians the RRSP will be their main source of retirement funding.
  • The RRSP is also a good savings tool; since money is contributed tax deferred it is taxable upon withdrawal, reducing the incentive to dip into your retirement savings early.
  • RRSPs are a good tool if you expect your retirement income to be less than your current working income. The funds withdrawn in retirement will be taxed in a lower tax bracket.

If you are trying to decide between contributing to the TFSA over your RRSP please take a moment to review our presentation on RRSP vs. TFSA






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