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and directly reduce your taxable income while any growth on your assets in the account are tax sheltered until withdrawn.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. 

The Basics

To open an RRSP, you will need:

  • A Canadian Social Insurance Number
  • To have filed an income tax return the previous year and declared earned income
  • Canadian employment or business income or unused contribution room
  • To be a Canadian resident

Key terms

  • Annuitant: Registered owner of the RRSP.
  • "First 60 Days" contributions: Contributions made in the first 60 days (typically the first two months) of the year. These contributions may be applied against either the earned income of the previous year or the year in which they are made.
  • "Remainder of the Year" contributions: Contributions made between March and December. These amounts are used to reduce taxable income in the year in which the contribution was made.
  • Pension Adjustment (PA): The value of any pension benefits accruing from participation in a registered pension plan (RPP) or deferred profit-sharing plan (DPSP).
  • Unused contribution room: The contribution amount that was not used in prior tax years and is provided on the Notice of Assessment from the Canada Revenue Agency (CRA).
  • Earned income: Includes full and part-time employment income, self-employment income, net rental income, CPP/QPP disability payments. Does not include investment income (interest, dividend income and capital gains), CPP/QPP pension payments, OAS regular pension payments, income from RRIFs and annuities. (Note: this is not an exhaustive list)

Key Facts

Contribution Deadline

  • March 1, 2019 – 11:59 PM (local time)
  • Contributions made during the first 60 days of 2019 can be applied against income earned in either the 2018 or 2019 taxation year

Contribution Limit

  • The lesser of $26,230 (for 2018) or 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 at
  • Over-contributions:
    • There is a $2,000 lifetime over-contribution limit
    • Penalty tax of 1% per month on the over-contributed amount may apply until withdrawn from the plan
    • Over-contributions can be used as deductions in future years or transferred to a non-registered account

Carry Forward

  • RRSP contribution room accumulated after 1990 can be carried forward indefinitely to subsequent years


  • You can contribute to an individual RRSP if you have employment or business income or unused contribution room, up until December 31 of the year you turn 71
  • You cannot contribute to an RRSP if you’re a non-resident or if your income consists solely of estate income, dividends, royalties or capital gains

Minimum Age

  • There is no minimum age for contributing to an RRSP

Maximum Age

  • If you’re turning 71, this would be the last year in which you may contribute to your RRSP. The RRSP must be converted to a Registered Retirement Income Fund (RRIF) or an annuity or collapsed by December 31
  • After age 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

Spousal RRSP

  • Contributor receives a tax deduction, but their spouse or common law partner is the registered owner/annuitant of the plan
  • With a Spousal RRSP, couples can split income and reduce their combined tax rate. The spouse with the higher income takes the immediate tax deduction and 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

*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.