Registered Retirement Savings Plan
Saving for your retirement? The Registered Retirement Savings Plan (RRSP), a tax-deferred registered account, is specifically designed to help you save for your retirement. Because of their tax advantages RRSP are an important tool in the retirement planning toolbox for Canadians.
A smarter way to save for retirement
Reduce your annual tax bill
You can claim the deduction of RRSP contributions on your income taxes, and any unused contribution room carries over to the next year.
Grow your assets tax free
Any investment income, dividends or capital gains you earn in your RRSP is tax deferred. You only pay taxes on that income when you withdraw from your RRSP.
Use it for more than just retirement
You can withdraw funds. from your RRSP for a qualifying home purchase or to enrol in a full-time education program.
RRSP Basics
- The RRSP is a registered account designed to help Canadians save for retirement.
- You can open an RRSP if you:
- are a Canadian resident with a Social Insurance Number
- are between 18 and 71 years old
- have earned income and have filed a tax return
- RRSP contributions are tax-deductible, potentially lowering your income tax bill.
- Each year, you to contribute the lesser of 18% of your earned income from the previous year (to an annual maximum, $30,780 in 2023), minus any company-sponsored pension plan contributions.
- RRSPs allow for a lifetime overcontribution amount of $2,000.
- RRSP withdrawals can be made tax free in the case of the Home Buyers Plan and Lifelong Learning Plan. Any other withdrawals are subject to withholding tax and must be included as income on that year’s tax return.
- Any investment income you earn in your RRSP can grow tax free until it is withdrawn.
- You must close your RRSP by December 31 of the year in which you turn 71 years old. The money can be transferred into a Registered Retirement Income Fund (RRIF), to an annuity, or the funds withdrawn.
How you invest is up to you
A self-directed RRSP allows you to choose and manage your own investments within the account. You can buy and sell stocks, bonds, and other securities, giving you greater control over the investment options and potentially greater returns.
What's the best account option for me?
| FHSA | TFSA | RRSP |
| A registered account that allows prospective first-time home buyers to save for a down payment on a tax-free basis | A versatile and flexible registered tax-free investing account. | A tax-deferred registered retirement account |
| Annual Contribution Limit: $8,000 | Annual Contribution Limit: $7,000 | Annual Contribution Limit: 18% of the previous years' income, up to $31, 560 |
| Contributions are tax-deductible and qualifying withdrawals are tax-free | Withdrawals are tax-free | Contributions are tax deductible. Withdrawals (except in the case of the Home Buyer’s Plan or Lifelong Learning Plan) are subject to withholding tax |
Annual contribution deadline: |
Annual contribution deadline: December 31 Learn more about TFSAs |
Annual contribution deadline:
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Open a Qtrade RRSP
- To set up an RRSP, complete the application to open a Qtrade RRSP account.
- If you have an existing RRSP account, it can be transferred from one provider to another without tax consequences. The transfer process involves opening a new RRSP account with Qtrade and initiating a transfer request from the existing account.
- You can open an RRSP if you are: a Canadian resident with a Social Insurance Number, have earned income (and have filed a tax return), are between 18** and 71 years old.
**Technically, there is no minimum age to have an RRSP, but to open an RRSP at Qtrade, you must be the age of majority in the province where you reside.
Frequently asked questions
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You can open an RRSP if you:
- are a Canadian resident and have a Social Insurance number
- are between 18 and 71 years old
- have earned income and have filed a tax return in Canada
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Your allowable RRSP contribution room is the lower of:
- 18% of the earned income reported on your tax return for the previous year
- The maximum annual contribution limit for the year (for 2024 tax year, the maximum is $31, 560)
- The remaining limit after any employer-sponsored pension plan contribution (known as your “pension adjustment”, found on your T4 or T4A slip).
Since 1991, the government has allowed RRSP holders to carry forward unused RRSP contribution room. If there are income-earning years in which you filed a tax return but did not make an RRSP contribution, you can use that room to catch up on your contributions. Your excess RRSP contribution room is listed on your previous year’s Notice of Assessment, or by logging in to the Government of Canada’s My Account.
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Any withdrawal from your RRSP (except in the case of the Home Buyer’s Plan or Lifelong Learning Plan) is subject to withholding tax and is treated as taxable income in the year it is withdrawn. You must include it as income on that year’s tax return.
The financial institution where you hold your RRSP will withhold a percentage of the amount withdrawn.
- 10% on withdrawals up to $5,000 (5% in Quebec)
- 20% on withdrawals between $5,000 and $15,000 (10% in Quebec)
- 30% on withdrawals over $15,000 (15% in Quebec)
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You cannot open a joint RRSP. However, you can open a spousal RRSP, which is an account registered in the name of your spouse (or common-law partner). They direct the investments within the RRSP, but you make the contributions to it, and get the tax deduction benefit on your own tax return.
When you contribute to your spouse’s RRSP, you reduce your own contribution limit, but receive the deduction on your taxes. If your spouse earns a lower income than you, that deduction could make a bigger difference on your tax return than on theirs.
Contributing to a spousal RRSP can help you and your spouse split your income more evenly in retirement. This could be helpful if you earn more money than your spouse and you’re likely to be in a higher tax bracket when you both retire. It could also help if you have a pension plan from your job and your spouse does not. However, if your spouse’s income will be in line with yours in retirement, a spousal RRSP is likely unnecessary.
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The HBP lets you withdraw up to $35,000 from your RRSP to buy or build a qualifying home. To qualify, you must be considered a first-time home buyer, be a Canadian resident, and intend to occupy the home within one year of buying/building it. You won’t have to pay tax on the withdrawal as long as you pay back the funds to your RRSP over a period of 15 years.
For more information, please visit the Government of Canada’s web page.
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The Lifelong Learning Plan (LLP) allows you to withdraw from your RRSP to pay for full-time training or education for you or your spouse/common-law partner. You can withdraw up to $10,000 per calendar year, to a total of $20,000. You won’t have to pay tax on the withdrawals as long as you pay back the funds to your RRSP over a period of 10 years.
For more information, please visit the Government of Canada’s web page.
Online brokerage services are offered through Qtrade Direct Investing, a division of Aviso Financial Inc. Qtrade and Qtrade Direct Investing are trade names or trademarks of Aviso Wealth Inc. and/or its affiliates.
Aviso Wealth Inc. ('Aviso') is a wholly owned subsidiary of Aviso Wealth LP, which in turn is owned 50% by Desjardins Financial Holding Inc. and 50% by a limited partnership owned by the five Provincial Credit Union Centrals and The CUMIS Group Limited. The following entities are subsidiaries of Aviso: Aviso Financial Inc. (including divisions Aviso Wealth, Qtrade Direct Investing, Qtrade Guided Portfolios, Aviso Correspondent Partners), and Northwest & Ethical Investments L.P.
The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes, and it is not intended to provide specific advice including, without limitation, investment, financial, tax or similar matters. Information, figures, and charts are summarized for illustrative purposes only and are subject to change without notice. All investments are subject to risk, including the possible loss of principal.