Retirement Savings

Retirement Savings



A Registered Retirement Savings Plan (RRSP) is an investment account that is registered with the Canada Revenue Agency (CRA) and allows you to save money on a tax-deferred basis until you retire – a tax-efficient way to build your retirement savings. Contributions made to an RRSP are tax-deductible and directly reduce your taxable income while any growth on your assets in the account are tax sheltered until withdrawn. The plan can hold a variety of investments including: GICs, mutual funds, stocks, bonds and ETFs.


RRSP Fast Facts (PDF 370KB)


To Open an RRSP, an Investor Needs:

  • A Canadian Social Insurance Number
  • To have filed an income tax return the previous year and declared earned income
    • Can contribute to an RRSP if investor has Canadian employment or business income, or unused contribution room

Did You Know?

  1. Immediate tax savings as RRSPs allow the holder to deduct the amount of their contribution from their income on their tax return.
  2. Savings are tax-deferred and grow until they are withdrawn, when the holder is potentially in a lower tax bracket.
  3. Benefit from the power of compounding growth. A pre-authorized contribution (PAC), i.e., a regularly scheduled contribution coming directly from the holder’s bank account, can help build retirement savings with minimal effort.
  4. Government retirement programs may not be enough.


RRSP - Reduce Taxes Now
  • Canadians can enjoy immediate tax savings because an RRSP allows you to deduct from your income on your tax return the amount of the contribution made in the same tax year and/or the first 60 days of the following year
  • RRSP contributions can defer and potentially lower the amount of income tax you pay because, when you withdraw the money from a RRIF and pay income tax on it, you’re likely to be in a lower tax bracket than today


  • $5,000 RRSP contribution made at different marginal tax rates
  • The actual cost of the contribution is reduced because of lower taxes
Marginal Tax Rate* 32% 39% 46%

RRSP contribution

$5,000 $5,000 $5,000
Reduced taxes $1,600 $1,950 $2,300

Actual cost of contribution**

$3,400 $3,050 $2,700

* Amount withdrawn would be taxed at the person’s marginal tax rate when added to their tax return. Source: Canada Revenue Agency; this is a hypothetical example to be used for illustrative purposes only.

** Excludes taxes to be paid upon withdrawing the money from the RRSP (e.g., RRIF)



  • March 1, 2025
  • Contributions made during the first 60 days of:
    • 2025 can be applied against the 2024 or 2025 taxation year 


  • The lesser of $31,560 for 2024 and 18% of earned income from your previous tax year, minus any pension adjustments*, plus unused contribution room from previous years
  • To find your contribution limit:
    • See your previous year’s Notice of Assessment from the Canada Revenue Agency (CRA)
    • Access your information online using the My Account feature on the CRA website
  • If you are unable to maximize your RRSP contribution in any given year, your unused contribution room can be “carried forward” to a subsequent year


  • $2,000 lifetime over-contribution limit
  • Penalty tax of 1% per month on the amount over the $2,000 limit may apply until withdrawn from the plan

Age Limits

  • No minimum age for contributing to an RRSP
  • If an investor turns 71 this year:
    • By Dec. 31, they must convert their RRSP to a Registered Retirement Income Fund (RRIF) or an annuity, or cash it in
    • They can still contribute to their RRSP until Dec. 31 if they have unused contribution room or earned income last year and filed a tax return

Spousal RRSPs

  • Contributor receives a tax deduction, but their spouse or common-law partner is the registered owner (annuitant)
  • With a Spousal RRSP, couples can split income and reduce their combined tax rate. The spouse with the higher income makes the contribution and takes the immediate tax deduction. Then the money in the RRSP is taxed to the other spouse when it is withdrawn – often at a lower rate
  • All or a portion of RRSP contributions can be contributed to an RRSP in a spouse's name. For example, an investor with contribution room of $7,200 for this year can contribute $5,000 to their own RRSP and $2,200 to a spousal RRSP or the full $7,200 to the spousal RRSP
  • The spouse does not need to have earned income or their own contribution room
  • An annuitant can have a spousal plan and a non-spousal plan
  • Once a plan is designated as spousal, it can only be changed to a non-spousal plan upon death or marriage breakdown. Certain conditions must be met
  • After 71, if you continue to have earned income, you can contribute to a spousal RRSP up until December 31 of the year your spouse or common-law partner turns 71 (subject to contribution room)

Continuing to Contribute to an RRSP

An investor can still make an RRSP contribution**:

  • The year that the investor turns 71, provided it’s done before December 31
  • To a Spousal RRSP up to, and including, the year in which the spouse turns 71

*Pension Adjustment (PA) represents the value of any pension benefits accruing from participation in a registered pension plan or deferred profit-sharing plan. A Past Service Pension Adjustment (PSPA) arises in rare instances when a pension plan has benefits for a post-1989 year of service upgraded retroactively.
** The amount of the final contribution is calculated in the same way as a regular RRSP contribution – the lesser of $31,560 for 2024 or 18% of earned income from your previous tax year, minus any pension adjustments, plus unused contribution room from previous years.

RRSP withdrawals are subject to withholding taxes.* The amount withdrawn would be taxed at the taxpayer's personal marginal tax rate when added to their tax return.

RRSP Withdrawn Amount All provinces exc. Quebec
(Federal & Provincial)

$5,000 or less

10% 5% + 14%
$5,000.01 to $15,000 20% 10% + 14%

$15,000 or more

30% 15% + 14%
* These rates do not apply to qualifying redemptions for the Home Buyers’ Plan or the Lifelong Learning Plan or for transfers to another registered plan.

If an investor’s tax rates are the same when contributing and withdrawing, they will end up with the same results from either an RRSP or TFSA, given the same rate of return.


Pre-tax income

$1,000 $1,000

Income tax paid

(at a hypothetical marginal tax rate of 43.41%)

$434 $0
Amount invested $566 $1,000

Total in each plan after 20 years 

(assuming hypothetical rate of return of 5% compounded annually)

$1,502 $2,653

Tax due when the money is withdrawn

(at a hypothetical marginal tax rate of 43.41%)

$0 $1,152

Cash in hand after 20 years

$1,502 $1,502

Source: AGF Investments Inc. Based on a marginal tax rate of 43.41% (2023 Ontario Marginal Tax Rate for interest and regular income for a taxable income of $150,000). This chart is a hypothetical example to be used for illustrative purposes only.


For more information on the key differences between RRSPs and TFSAs, read this article.

Home Buyers' Plan (HBP)

For some Canadians, coming up with the down payment needed to buy their first home can be a challenge. But with the HBP, to help buy or build your first home you can now withdraw from your RRSP up to $60,000 (up from $35,000) – and your spouse can too for a total of $120,000.

You have 15 years to pay back the amount you withdrew, and must start paying it back in the 2ndyear after you buy your home.

  • NEW For withdrawals made between Jan. 1, 2022 and Dec. 31, 2025, repayments start in the 5th year after the withdrawal

The minimum payment each year is calculated by the CRA as the balance owing divided by the years remaining in the 15-year repayment schedule. You can pay more than the minimum amount, which can be helpful because you could pay back larger amounts if your income increases.

You’ll also need to enter into a written agreement to take part in this program, which is something your financial advisor can help you with. 

Key points to remember:
  • The HBP withdrawal can be put towards the down payment on a qualifying first home – or a home for a related person with a disability

  • First-time home buyer hasn’t owned a home in the current year or prior 4 years

  • If you're doing multiple withdrawals, the money needs to be withdrawn within the same calendar year

  • Qualifying withdrawals won’t be taxed or have any withholding tax taken on the amount withdrawn 

  • When repaying your RRSP, you can pay up to 60 days after the year-end

  • For more information on the First Home Savings Account (FHSA) and you can combine that program with the HBP to increase the amount available for your downpayment, visit
Transferring to a First Home Savings Account (FHSA)

The First Home Savings Account (FHSA) enables investors to save on a tax-free basis for their first homes.

Funds can be transferred tax-free from an RRSP to an FHSA and from an FHSA to an RRSP with no impact to the investor's RRSP contribution room.

However, you would have already received a tax deduction for the RRSP contribution so you wouldn't get another one for money transferred from an RRSP to an FHSA. 

Any savings not used to buy a home can be transferred tax-free to an RRSP.

For more information, visit

Going Back to School - Lifelong Learning Plan

Withdrawing money from your Registered Retirement Savings Plan (RRSP) before you’re ready to retire can be a scary thought – and for good reason. When you take money from your RRSP to cover unexpected expenses or pay down debt, you have to pay tax on those withdrawals (anywhere from 12% to 49% depending on where you live and how much you earn).

But did you know you can use your RRSP to help cover the costs of going back to school?

The Lifelong Learning Plan (LLP) is a federal government program that enables you to borrow up to $10,000 a year from your RRSP – to a maximum of $20,000 over four years – to help cover full-time education costs. The school you’re attending also has to qualify under the program. You can use this program to fund your education or your spouse’s, but not your children’s.

You’ll need to start paying back the money you borrowed from your RRSP by the fifth year after making your first withdrawal or in the second year after you stop going to school full-time, whichever comes first.

You must pay back at least 10% of what you borrowed in the first year that you make repayments, and you have up to 10 years to pay back the entire amount. You’ll be taxed on the money you withdrew unless you meet both of these conditions.

You can use the LLP multiple times until you turn 71, as long as you’ve paid back any amounts you’ve already withdrawn under the program.

Let’s say that in September 2019, you borrowed $10,000 to go back to school full-time. You borrowed an additional $10,000 over the next three years (for a total of $20,000) and graduated in June 2023. Here’s what your payback schedule could look like.

LLP sample repayment schedule

Repayment year

Opening balance

Minimum amount to avoid extra income tax

Amount repaid

Closing balance



















































Note: This example is hypothetical, for illustrative purposes only.

Locked-In Addenda Forms

A Locked-In Retirement Account (LIRA) or Locked-In Retirement Savings Plan (LRSP) in Canada is a government-regulated investment account designed to hold pension funds when an individual leaves their job before retirement. 

Locked-In Plans can fall under provincial pension legislation or Federal pension legislation. The rules and regulations, including the age at which funds can be accessed and the options for conversion, vary by province and the specifics of the originating pension plan.

Click below to download the relevent forms: 

This material is for informational and educational purposes only. It is not a recommendation of any specific investment product, strategy, or decision, and is not intended to suggest taking or refraining from any course of action. It is not intended to address the needs, circumstances, and objectives of any specific investor. This information is not meant as tax or legal advice. Investors should consult a financial advisor and/or tax professional before making investment, financial and/or tax-related decisions.

Continuing Education

Table for One: Single-Income Planning Through Death or Divorce
Personal Tax Preparation Planning: Advisors' Virtual Tax Preparation Companion
Current Issues
Interest and Inflation
Current Issues
Essential Tax Facts
Planning for Retirement
Retirement Income for Employees
Planning for Retirement
Retirement Planning for Business Owners
Planning for Retirement
When to Take CPP
Planning for Retirement
Locked-In Plans
Planning for Marriage
Registered Plans
Using Registered Investments to Build Capital and Minimize Taxes

This content is for advisor use only. No portion of this content may be reproduced or distributed to the public. AGF Investments disclaims any responsibility for any advisor sharing this with investors.

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