Registered Retirement Savings Plan (RRSP)

An RRSP is a Canadian registered account designed to help you save for retirement. The core idea is a tax trade: you get a tax deduction when you put money in, your investments grow tax-free while they’re inside the account, and you pay tax when you take the money out.

If you earn $70,000 and contribute $10,000 to your RRSP, your taxable income drops to $60,000 for that year. That can mean a meaningful tax refund. The idea is that when you eventually withdraw in retirement, you’ll likely be in a lower tax bracket than during your working years, so you’ll pay less tax overall.

Contribution room

Your RRSP contribution limit is 18% of your previous year’s earned income, up to an annual maximum (which changes each year). Like a TFSA, unused room carries forward. You can check your exact limit on your CRA Notice of Assessment or by logging into your CRA My Account.

Why it matters

The RRSP is especially valuable if you’re currently in a higher tax bracket and expect to be in a lower one when you retire. The tax deduction today is worth more than the tax you’ll pay later.

One thing to keep in mind: unlike a TFSA, withdrawals from an RRSP are added to your income and taxed at your marginal rate. There’s no “free withdrawal” option (outside of specific programs like the Home Buyers’ Plan). So the RRSP works best when you can leave the money alone until retirement. If you’re deciding between the two, our TFSA vs. RRSP guide walks through the tradeoffs.

In Greenline

Greenline shows your RRSP holdings, performance, and fees alongside all your other accounts.