Registered Retirement Savings Plan

A Registered Retirement Savings Plan (RRSP) is an account that you use to help you save for your retirement. RRSPs help you reduce your taxes while you save, so they encourage you to save more. Anyone who files a tax return can open one. There are no age limits.

Four common questions about RRSPs

1. How much can I put into my RRSP?

   Starting an RESP today allows you to save immediately for a child’s future post-secondary education. If you’re wondering how much to save and when to start, the answer is: save as much as you can afford and start today. By starting early, tax-sheltered earnings on your savings can grow surprisingly quickly.

2. How do I reduce my taxes?

   When you put money into your RRSP account, you get a receipt proving how much you contributed. You don’t pay income tax on this amount at tax time if it stays in your RRSP. You only pay the tax when you take the money back out of the plan.

3. How do I make my savings grow?

   You use the money in your RRSP account to buy investments. You can choose from many kinds of investments. The money you make on your investments is not taxed, until you take it out of the plan.

4. Can I spend the money in my RRSP before I retire?

   The answer is yes, but you will have to pay the tax you owe unless you borrow the money to:

   • Buy a first home: You can use up to $20,000 from your RRSP for a down payment on your first home.
   • Pay for education: You can use some of the money in your RRSP to help you or your spouse go back to school. There are rules about how much you can take out each year.

   If you borrow money from your RRSP for a home or education, you will have to pay it back, but you will have a number of years to do so.