RRSP account | What is an RRSP

What’s an RRSP and why get one?

A Registered Retirement Savings Plan is an account created for Canadians to save for retirement while saving on taxes before retirement.

Grow your retirement savings

Invest your hard-earned money, have it grow over time, defer your taxes and withdraw it as retirement income later.

Pay less income tax now

Contributions can be used as deductions against your earned income, lowering the tax you pay and sometimes getting a tax refund you can invest into your RRSP or TFSA.

Home Buyer’s Plan

You can withdraw up to $35,000 to buy or build a home if you're a first-time home buyer.

‍Learn about the Home Buyer’s Plan

Lifelong Learning Plan

You can also withdraw up to $10,000 a year for full-time training or education for you, your spouse or common-law partner.

Learn about the Lifelong Learning Plan‍

How an RRSP works.

Money put in an RRSP account is mainly reserved for retirement. So, there are rules around how the money gets withdrawn and how much money can be contributed.

Choose an investment "vehicle"

These are the actual investments that go into your account. They can be low-risk, like savings accounts or term deposits; or high-risk, like stocks. Mutual funds^* sit in the middle and have a variety of risk levels. You can also choose a mix.

Open an RRSP

To be eligible you must be:

71 years old or under
Have filed income tax returns before and reported "earned income"

To open an account, meet with an advisor. If you want to invest on your own, check out our ways to invest online.

Make your deposits

Put your money into the investment, or multiple investments, that you chose above. You have a total contribution limit that increases every year that you have "earned income". There’s a penalty if you over-contribute.

Check on your progress

Over time, you should see your investment grow. As time passes, continue to make contributions and even add different types of investments to the mix so you can save and earn more.

‍Book a portfolio review

Every year at tax season

You can deduct your contributions from your taxable income and save taxes. Note, you don’t have to deduct your contributions within the same year that you make them. In some cases, you may see more benefit in deducting over several years, or in higher income years.

Withdraw, re-invest, invest more

By the end of the year you turn 71, your RRSP must be converted. Most people will convert it into a RRIF and start withdrawing from it as their retirement income the next year. This will be taxable, but you’ll likely be in a lower tax bracket. Cashing out is an option but it's generally not recommended. Buying annuities are another option.

You can also withdraw earlier from your RRSP for your first home or education if it meets certain criteria. Money withdrawn for those purposes won't count towards your taxable income that year.

Book a call to talk RRSPs

RRSP contribution cheat sheet.

18% or $30,780

Contribution room

In 2023, your contribution room is 18% of last year’s earned income or $30,780, whichever’s lower – plus, any unused contribution room carried over from before.

Feb 29

Last day for contribution

Contributions made in the first 60 days of the year can be used to reduce your taxable income for the previous year or any year after. In the year that you turn 71, the last day to contribute is Dec. 31.

Spousal RRSP

Save with your partner

If you earn significantly more than your spouse or common-law partner, you may benefit from contributing to a spousal RRSP. This could help you save taxes when the two of you withdraw from your RRSPs at retirement.

Invest your way.

Thinking about the future can be tough. Thankfully, our experts do it everyday. Let us handle your investment planning.

Book an appointment

Manage your investments online with Qtrade Direct Investing^® or contribute anytime to Qtrade Guided Portfolios^®, a fully-automated investing platform.

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Ask the pros.

Our pros with some advice on RRSPs.

What's my contribution room and maximum deduction?

Your Notice of Assessment from the CRA, received after filing your tax return, will state your RRSP deduction limit for the following year. This information is also available in My CRA Account. The calculation of the amount will depend on whether you are a member of a pension plan, and if you are, the type of pension plan.

The amount you can contribute to an RRSP/PRPP in a given year is:

18% of your earned income for the prior year, up to the annual maximum amount

Any "Pension Adjustment" (PA) for the prior year

Your PA for the prior year should be on your T4 slip (Box 52) or T4A (Box 034). The pension adjustment (PA) amount is the value of the benefits you earned in the year under your employer's registered pension plans (RPP) and deferred profit sharing plans (DPSP), and possibly some unregistered retirement plans or arrangements.

Any "Past Service Pension Adjustment" (PSPA) for the current year

The PSPA is the sum of the additional pension credits that would have been determined for prior years if the RPP had provided for the upgraded benefits or additional period of pensionable service at the time each pension credit was first required to be determined.

Any "Pension Adjustment Reversal" (PAR) for the current year

In a DPSP or defined contributions (money purchase) pension plan, the PAR is the amount of the employer contributions that are unvested at termination of membership. In a defined benefit provision the PAR is generally the difference between:

the PAs and PSPAs earned to termination of membership, and
the commuted value of benefits.

This information is in Box 2 of your T10 slip.

Unused contribution room from previous years

Maximum RRSP Contribution

You can deduct what you contribute to your RRSP from your taxable income. You can also deduct previous contributions if you haven't applied them as deductions yet or continue to roll them over.

What if I want to transfer my RRSP from another institution?

If you’d like to transfer an existing RRSP from another financial institution to Vancity, simply print out the RRSP transfer application form. You can fax the completed form to us at 604-877-7999 or book an appointment.

What if I don’t use all my RRSP contribution limit?

Unused contribution room can be carried forward to use in any future year. However, contributions must be made by the end of the year the owner of the RRSP turns 71.

Do I have to immediately deduct all my RRSP contributions?

No. You can choose when to deduct them on your income tax file while continuing to invest. Deduct them now, or in a future year, or even divide them between years. Waiting to deduct contributions may increase your tax savings.

We suggest you check with your tax advisor or your Vancity investment professional before electing to carry-forward RRSP deductions.

Can I catch up once I'm retired?

Yes. Many people forget they can contribute even without current earned income (for example, after retiring). If you have unused RRSP contribution room from past years and funds available, contributing to your own or your spouse's RRSP is allowed up until the end of the year the planholder turns age 71.

Watch out for special situations where contributing to an RRSP may not make sense. For example, where you'll lose eligibility for the Guaranteed Income Supplement (GIS), or your tax rate when withdrawing in retirement will be much higher than your initial tax savings. Other options, such as a Tax Free Savings Account (TFSA), might be more appropriate for your circumstances.

Talk to us. We can help you create a plan to catch up on unused RRSP contribution room.

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Qtrade Guided Portfolios is a trade name of Credential Qtrade Securities Inc., Member of the Canadian Investor Protection Fund.

*Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise stated, mutual funds, other securities and cash balances are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer that insures deposits in credit unions, their values change frequently and past performance may not be repeated.

^ᶲ Online brokerage services are offered through Qtrade Direct Investing, a division of Credential Qtrade Securities Inc. Qtrade and Qtrade Direct Investing are trade names and trademarks of Aviso Wealth Inc. and its subsidiaries.

Registered Retirement Savings Plan (RRSP)

Lower your taxes while investing for retirement.