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Registered Retirement Savings Plan 


RRSPs mean smart savings for the future 

A Registered Retirement Savings Plan (RRSP) is a tax-advantaged savings plan designed to help Canadians save for retirement.

The fundamental principle behind an RRSP is simple: you contribute money to your RRSP account, and these contributions are tax-deductible. This means that when you file your annual income tax return, the amount you contribute to your RRSP can be deducted from your taxable income, potentially reducing your tax owed. The idea is to encourage Canadians to save for retirement by providing them with an upfront tax incentive.

Key Benefits of RRSPs

  • Tax Deferral: One of the most significant advantages of an RRSP is the ability to defer taxes until retirement. While you contribute pre-tax dollars, the investments in your RRSP grow tax-free until withdrawal.
  • Tax Deductions: Contributions to your RRSP can reduce your taxable income for the year, potentially leading to a tax refund or lower tax bill.
  • Flexible Investment Options: RRSPs offer a wide range of investment options, including stocks, bonds, mutual funds*, term deposits, and more, allowing you to tailor your investments to your risk tolerance and financial goals.
  • Spousal RRSPs: Couples can use spousal RRSPs to income-split in retirement, potentially reducing their overall tax burden.
  • Homebuyers' Plan (HBP) and Lifelong Learning Plan (LLP): RRSPs can be used for various purposes before retirement, including buying your first home or funding education through these specialized programs.

Contribution Limits and Rules

While RRSPs offer significant tax advantages, there are rules and limits in place to ensure that they are used primarily for retirement savings:

  • Contribution Limit: The annual contribution limit is a percentage of your earned income, up to a specified maximum. Contribution room accumulates from year to year, and you can carry forward unused room.
  • Contribution Deadline: The deadline to contribute to an RRSP for a specific tax year is typically March 1st of the following year.
  • Withdrawals: Withdrawals from an RRSP are subject to taxation, and there are rules governing when and how you can make withdrawals.
  • Maturity: By the end of the calendar year in which you turn 71, you must convert your RRSP into a Registered Retirement Income Fund (RRIF) or use the funds to purchase an annuity.

Making the Most of Your RRSP

To maximize the benefits of your RRSP, it's essential to develop a solid retirement savings strategy. This includes setting realistic savings goals, selecting appropriate investments, and regularly reviewing your portfolio to ensure it aligns with your objectives and risk tolerance – we are here to help.

In this guide, we will delve deeper into each of these aspects, providing you with practical tips and expert advice to help you navigate the world of RRSPs with confidence.

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1. What is an RRSP, and how does it work?

An RRSP, or Registered Retirement Savings Plan, is a tax-advantaged savings plan designed to help Canadians save for retirement. Contributions made to an RRSP are tax-deductible, which means you can reduce your taxable income by the amount you contribute. The investments within the RRSP grow tax-free until you withdraw the funds during retirement.

2. How much can I contribute to my RRSP?

The annual RRSP contribution limit is determined based on your previous year's income. You can find your contribution limit on your Notice of Assessment from the Canada Revenue Agency (CRA). It's essential to stay within your contribution limit to avoid penalties.

3. When is the RRSP contribution deadline?

The RRSP contribution deadline for a specific tax year is typically March 1st of the following year. For example, contributions for the 2023 tax year must be made by March 1, 2024.

4. What happens if I over-contribute to my RRSP?

Over contributions to your RRSP may be subject to a penalty tax of 1% per month on the excess amount. It's crucial to monitor your contribution limits and rectify any over contributions promptly.

5. Can I have multiple RRSP accounts?

Yes, you can have multiple RRSP accounts with different financial institutions. However, it's essential to keep track of your total contributions across all accounts to ensure you don't exceed your contribution limit for the year.

6. Can I use my RRSP to buy my first home?

Yes, through the Home Buyers' Plan (HBP), you can withdraw up to $35,000 from your RRSP tax-free to purchase your first home. There is a repayment schedule to return the funds to your RRSP over 15 years.

7. Can I use my RRSP for education expenses?

You can use your RRSP funds for education through the Lifelong Learning Plan (LLP). This plan allows you to withdraw funds tax-free for your or your spouse's education and repay them over time.

8. When can I start withdrawing from my RRSP?

You can start withdrawing from your RRSP at any age, but it's typically best to wait until retirement. By the end of the calendar year in which you turn 71, you must convert your RRSP into a Registered Retirement Income Fund (RRIF) or purchase an annuity, or both.

9. Is there a maximum age limit for contributing to an RRSP?

You can contribute to your RRSP up until age 71 as long as you have earned income and contribution room.

10. What happens to my RRSP when I pass away?

Upon your death, your RRSP can be transferred to your spouse's RRSP or RRIF on a tax-deferred basis. If you don't have a surviving spouse, the RRSP is typically included in your estate, and the proceeds are subject to taxation.

11. What are the investment options for RRSPs?

Our RRSPs offer a wide range of investment options, including savings accounts, term deposits, stocks, bonds, mutual funds* depending on your goals and needs. Your choice of investments should align with your financial goals and risk tolerance.


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*Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments.  Please read the prospectus before investing.  Unless otherwise stated, mutual funds, other securities and cash balances are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer that insures deposits in credit unions. Mutual funds and other securities are not guaranteed, their values change frequently and past performance may not be repeated.