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Whether you already use a Registered Retirement Savings Plan (RRSP), or you\u2019re\u00a0looking to set one up<\/a>, here\u2019s some helpful information to help you stay organized.<\/p>\n\n\n\n RRSPs are investment accounts designed to help people save for retirement<\/p>\n<\/li>\n\n\n\n Money inside of an RRSP grows tax-deferred until withdrawal<\/p>\n<\/li>\n\n\n\n March 2, 2026 is the deadline for any 2025 contributions<\/p>\n<\/li>\n\n\n\n For 2025, you can invest up to 18 per cent of your previous year\u2019s earned income, up to a maximum of $32,490<\/p>\n<\/li>\n\n\n\n If you contribute more than $2,000 over your maximum limit, you\u2019ll get charged one per cent per month on the excess amount<\/p>\n<\/li>\n<\/ul>\n\n\n\n The RRSP was created to help people save for retirement. Unlike non-registered accounts, where any income, capital gains or dividends are subject to tax, money inside of an RRSP can grow annually on a tax-deferred basis. Once you remove money, you will have to pay as withdrawals are taxed at your regular tax rate.<\/p>\n\n\n\n The account works best when you contribute in your higher earning years (when you\u2019re in a top tax bracket) and when you withdraw in lower earning years (in retirement). That\u2019s because any money you invest lowers your taxable income, which can result in a tax refund (which many people put back into their RRSP). In retirement, if you are in a lower tax bracket, you\u2019ll pay less than if you were still in that higher bracket. Between the time you contribute and the time you withdraw, your investments can compound annually tax-free.<\/p>\n\n\n\n For the 2025 tax year, the RRSP contribution deadline is March 2, 2026. Contributions made within the first 60 days of the year (on or before the deadline) can be deducted from your 2025 taxable income and potentially result in a tax refund. You can also apply the deduction to a future tax year. Any contributions made after this date will generally be applied to the 2026 tax year, unless you decide to postpone taking the deduction.<\/p>\n\n\n\n Your maximum allowable RRSP contribution limit is generally 18 per cent of your previous year\u2019s earned income, up to the government maximum for the tax year ($32,490 for 2025<\/a>), minus your previous year\u2019s pension adjustment. A pension adjustment reflects the value of the benefits and savings under an employer\u2019s registered pension plans and deferred profit-sharing plans. Any unused deduction room from the preceding year is also carried forward for your use in the current year.<\/p>\n\n\n\n The Government of Canada sets the annual contribution limit. You can check your specific contribution limit by visiting\u00a0the My Account<\/a> for Individuals section of the Canada Revenue Agency (CRA) website.<\/p>\n\n\n\n It\u2019s good to know your contribution limit, as there can be penalties if you exceed your maximum lifetime limit by more than $2,000. (You are allowed to contribute more than the annual maximum if you have unused contribution room from prior years.) If you do end up investing more, you\u2019ll get charged 1 per cent per month on the excess amount over the $2,000 buffer. You will be required to pay this amount until you either withdraw the overage amount or your contribution room increases enough to absorb that extra amount.<\/p>\n\n\n\n To open an RRSP, you must:<\/p>\n\n\n\n Have a valid Social Insurance Number<\/p>\n<\/li>\n\n\n\n Be a Canadian resident for tax purposes<\/p>\n<\/li>\n\n\n\n File an income tax return in Canada<\/p>\n<\/li>\n\n\n\n Have earned income to contribute<\/p>\n<\/li>\n\n\n\n Open your account by the end of the year you turn 71<\/p>\n<\/li>\n<\/ul>\n\n\n\n Important:<\/strong> While there is technically no age minimum to open an RRSP, some financial institutions only allow those who are the age of majority in their home province to open an RRSP. <\/p>\n\n\n\n A\u00a0spousal RRSP<\/a>\u00a0is an RRSP that names your spouse as the \u201cannuitant\u201d \u2014 or owner \u2014 of the plan, even though you might be making the contributions. The main objective of a spousal RRSP is to shift retirement income from the higher-income-earning spouse to the lower-income-earning spouse. Your ability to contribute to a spousal RRSP is based on your own contribution room. This can be an effective income-splitting strategy. If, for example, you have $15,000 of RRSP contribution room available, you may contribute it to your personal RRSP, a spousal RRSP, or a combination of both, as long as the combined total doesn\u2019t put you over the $15,000 limit.<\/p>\n\n\n\n Here’s how the spousal RRSP compares to a personal one:<\/p>\n\n\n\nAt a glance<\/h2>\n\n\n\n
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What is an RRSP and how does it work?<\/h2>\n\n\n\n
When is the RRSP contribution deadline?<\/h2>\n\n\n\n
What is the RRSP contribution limit?<\/h2>\n\n\n\n
What happens if I overcontribute?<\/h2>\n\n\n\n
How can I open an RRSP?<\/h2>\n\n\n\n
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How does a spousal RRSP work?<\/h2>\n\n\n\n