Registered Retirement Savings Plan (RRSP)

A Registered Retirement Savings Plan (RRSP) is a government-approved savings account designed to help Canadians save for retirement. Contributions may reduce your taxable income, and investments grow tax-deferred until withdrawal.

Most Canadian residents with earned income can open an RRSP. Generally, you can contribute until December 31 of the year you turn 71, provided you have available contribution room.

Your annual contribution limit is based on 18% of your previous year’s earned income, subject to CRA limits and pension adjustments. Unused contribution room can be carried forward indefinitely.

RRSP contributions can reduce your taxable income, potentially lowering the amount of tax you owe. In addition, investment earnings inside the plan grow tax-deferred until withdrawal

Yes, you can withdraw funds before retirement, but withdrawals are generally subject to withholding tax and are added to your taxable income for the year. Certain government programs may offer exceptions.

Exceeding your RRSP contribution limit may result in penalties from the CRA. If an overcontribution occurs, corrective steps such as withdrawing excess funds and filing the appropriate forms may be required.

Yes. Through the Home Buyers’ Plan (HBP), eligible first-time homebuyers can withdraw up to $60,000 from their RRSP tax-free to purchase or build a qualifying home, provided repayment rules are followed.

Yes. Funds withdrawn under the Home Buyers’ Plan must generally be repaid to your RRSP over a 15-year period. Repayments typically begin in the second year after the withdrawal.