Calculate your Registered Retirement Savings Plan contributions, tax savings, and retirement projections.
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The Registered Retirement Savings Plan (RRSP) is a tax-advantaged retirement savings account that allows Canadians to save for retirement while reducing their current year's taxable income. Contributions are tax-deductible, and investments grow tax-deferred until withdrawal.
$31,156
Maximum annual contribution
18%
Of previous year's income
| Feature | RRSP | TFSA |
|---|---|---|
| 2025 Limit | 18% of income up to $31,156 | $7,000 (fixed) |
| Tax Treatment | Tax deduction now, taxed on withdrawal | No deduction, tax-free growth |
| Withdrawals | Taxed as income | Completely tax-free |
| Age Limits | 18+ to 71 | 18+ (no upper limit) |
| Best For | High-income earners, retirement | Emergency funds, flexibility |
Focus on bonds, GICs, and conservative ETFs. Lower risk, steady returns for risk-averse investors.
Mix of stocks and bonds (60/40 or 70/30). Moderate risk with growth potential.
Focus on stocks and growth ETFs. Higher risk for maximum long-term growth potential.
The RRSP contribution limit for 2025 is 18% of your previous year's income, up to a maximum of $31,156. This is an increase from $30,780 in 2023. Unused contribution room carries forward indefinitely.
Your RRSP contribution room = 18% of your previous year's income (up to $31,156) + any unused room from previous years. The CRA provides your contribution room on your Notice of Assessment.
Contribute early in the year to maximize tax-deferred growth. The deadline for RRSP contributions is March 1st (60 days after the end of the tax year) to claim the deduction for the previous year.
The HBP allows first-time homebuyers to withdraw up to $35,000 from their RRSP tax-free to purchase a home. The amount must be repaid over 15 years, starting in the second year after withdrawal.
At age 71, you must convert your RRSP to a Registered Retirement Income Fund (RRIF) or purchase an annuity. You can no longer contribute to an RRSP after age 71, but you can still contribute to a spousal RRSP.
Generally, choose RRSP if you're in a higher tax bracket now than you expect in retirement. Choose TFSA if you're in a lower tax bracket now or want more flexibility. Many Canadians benefit from using both strategically.
A spousal RRSP allows the higher-earning spouse to contribute to the lower-earning spouse's RRSP. This helps equalize retirement income and reduce overall taxes in retirement through income splitting.
Yes, you can withdraw from your RRSP at any time, but withdrawals are taxed as income and subject to withholding tax. Early withdrawals permanently reduce your contribution room and should be avoided unless necessary.
Risk-averse investors, those close to retirement, or those who prioritize capital preservation.
Moderate risk investors seeking growth with some stability. Good for most retirement savers.
Young investors with long time horizons who can handle market volatility for higher returns.
If your employer offers RRSP matching, always contribute enough to get the full match. This is essentially free money that you're leaving on the table if you don't take advantage of it.
Waiting until the last minute to contribute means missing out on months of tax-deferred growth. Contribute early in the year to maximize your returns.
Higher-earning spouses should consider spousal RRSPs to equalize retirement income and reduce overall taxes in retirement through income splitting strategies.
Choosing low-return investments like GICs for long-term RRSP growth defeats the purpose. Consider growth-oriented investments for younger investors with long time horizons.
Regular rebalancing ensures your portfolio stays aligned with your risk tolerance and investment goals. Set a schedule to rebalance annually or when allocations drift significantly.
Consider your current vs. expected retirement tax rates. If you expect to be in a higher tax bracket in retirement, TFSA might be more beneficial than RRSP.
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