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RRSP Overview

Registered Retirement Savings Plan

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 The growth on your assets in the account is tax sheltered until withdrawn.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

RRSP Benefits

  • Investments compound tax-deferred as long as they remain in the plan
  • Choose your investments from a wide range of options
  • Contributions are tax-deductible
  • Ability to finance full-time training or education for you and/or your spouse or common-law partner
  • Borrow from your RRSP to buy a qualifying first home or a home for a related person with a disability

Because RRSPs are registered accounts, they’re subject to certain rules. One rule puts limits on the amount of money you can contribute to the account in any given year. The amount changes, but for 2018, the maximum contribution is 18% of your income or $26,500, whichever is less. You can also catch up on contributions if you were unable to make the the maximum amount in previous years. To find out how much you can contribute, see the Notice of Assessment you received after filing your income taxes last year.

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