Registered Retirement Savings Plan, RRSP

A Registered Retirement Savings Plan (RRSP) is a retirement savings plan that you register with the federal government. Over time, you and/or your spouse/partner make contributions to the RRSP. The government allows you to deduct your annual RRSP contribution amount from your income (within certain limits). The funds you have in your RRSP grow on a tax deferred basis. You only pay income tax on this money when you take it out of your RRSP (unless you transfer the money to another registered investment plan such as a RRIF or borrow from it).

Anyone who files a tax return is eligible to open an RRSP account and you can have as many RRSP accounts as you want. Here are four common types of RRSP plans:

  • Basic RRSP
  • Self-directed RRSP
  • Group RRSP
  • Spousal or partner RRSP

You can have many different types of investments in your registered retirement savings plan such as but not limited to:

  • Guaranteed Investment Certificates (GICs)
  • Mutual funds (provided they are RRSP eligible)
  • Bonds (including Canada Savings Bonds, provincial savings bonds, corporate bonds, strip bonds)
  • Equities (Canadian and foreign)
  • Mortgage backed securities
  • Income trusts


RRSP Contribution Limits

Keep in mind that there are annual contribution limits to your registered retirement savings plan and this will vary depending on your situation. You can get the exact figure from your Notice of Assessment the government sends you after you have filed your income tax. If you can’t contribute the maximum amount in any year, you will have unused contribution room which means you can catch up in future years. However, there are catch up contribution limits on how much you can deduct from your income.


RRSP Withdrawals

It is possible to withdraw money from your RRSP at any time – check with your financial advisor to see if there are any fees to do this. You can also borrow some or all of your RRSP funds to use as a down payment to buy your first home or to help finance your education. But before you withdraw or borrow funds from your RRSP, talk to us first to find out the various restrictions.


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