RRSP Insurance
RRSPs offer tax-deferred savings. This means you won’t have to pay tax on your investments and any income earned on those investments until you start withdrawing funds.
RRSPs offer tax-deferred savings. This means you won’t have to pay tax on your investments and any income earned on those investments until you start withdrawing funds.
An RRSP also helps you lower your tax bill today, by allowing you to deduct RRSP contributions from your taxable income. By the time you retire you will likely be in a lower tax bracket, so withdrawals are taxed at a lower rate than today.
Any contributions into your RRSP can help you decrease your current taxable income. This means you won’t have to pay taxes on your contributions or any investment growth until you withdraw funds.
For most Canadians, withdrawing from your RRSP at a later point in life – in your 60s or 70s – means paying much less tax. Think of it this way: you’ll probably be in a much lower tax bracket when you’re retired in your 60s or 70s. So, you’ll be paying less tax when you withdraw from your RRSP at that age, all the while helping to lower your current tax bill.
If you exceed your RRSP contribution limit, the Canada Revenue Agency (CRA) may apply penalties and interest.
• You’ll be taxed 1% per month on any amount more than $2,000 above your limit.
• If you don’t pay within 90 days after the calendar year, you may face late-filing penalties and interest charges.
You can contribute until December 31 of the year you turn 71 years old.
You can contribute only what is available in your CRA contribution room.
Your Registered Retirement Savings Plan (RRSP) contribution limit is the maximum amount you can contribute each year. The Canada Revenue Agency (CRA) calculates this limit based on your previous year’s income, pension details, and unused room.
Use an RRSP to save for retirement while also saving for anything in a TFSA Contributions reduce your annual income, lowering your tax bill
You don’t pay tax on the growth of your investments in your RRSP until you withdraw it so you can keep more of your money.
You can borrow money from your RRSP to go to school or buy your first home without penalty, provided it is repaid within the required time You can make up for missed contribution room from previous years
Think of it this way: you’ll probably be in a much lower tax bracket when you’re retired in your 60s or 70s. So, you’ll be paying less tax when you withdraw from your RRSP at that age, all the while helping to lower your current tax bill.
Plus, you can hold a variety of investments in your RRSP, like:
Life Advice Insurance Inc. offers RRSPs, TFSAs and RESPs through segregated funds, insurance-based investments that can include maturity and death benefit guarantees. We do not sell mutual funds, stocks or ETFs.
For the 2026 tax year, you can contribute 18% of your previous year's earned income, up to a maximum of $33,810, plus any unused room carried forward from earlier years. Your exact limit is shown on your latest Notice of Assessment or in CRA My Account.
Contributions made during the calendar year and in the first 60 days of the following year can be deducted on that year's tax return. For example, contributions made up to early March can usually be claimed on the previous year's return.
An RRSP gives you a tax deduction now, and withdrawals are taxed later, so it usually works best if your income is higher today than it will be in retirement. A TFSA gives no deduction, but growth and withdrawals are tax-free, so it suits lower incomes and flexible goals. Many people use both. We can help you decide.
A spousal RRSP is an RRSP that you contribute to and claim the tax deduction for, but that belongs to your spouse or common-law partner. It can help split income in retirement so the couple pays less tax overall. Contributions use your own RRSP room.
The Home Buyers' Plan (HBP) lets first-time home buyers withdraw up to $60,000 from their RRSP, tax-free, to buy or build a home. The money must be paid back to your RRSP over 15 years, normally starting the second year after the withdrawal (the fifth year for withdrawals made from 2022 to 2025). Any amount not repaid on schedule is added to your taxable income.
In general, when an RRSP owner dies, the RRSP is treated as if it was cashed out, and the value is included in income on the final tax return. If your spouse or common-law partner is the beneficiary, the RRSP can usually be rolled over to their RRSP or RRIF tax-deferred, so they pay tax only when they withdraw. The rollover does not use their own contribution room. Talk to a licensed Life Advice advisor, and a tax professional, to plan your beneficiary.