Planning Your Retirement

What is a Registered Retirement Savings Plan (RRSP)?

The registered retirement savings plan (RRSP) is specially designed to provide you with retirement income. It is advantageous because your contributions entitle you to a tax deduction and generate investment income that is sheltered from income tax.

When you withdraw your funds at retirement, they become taxable. However, the taxation rate applicable is generally lower because your retirement income is usually lower, too.

The amount you may invest in your RRSP this year is determined on the basis of the income you earned last year. You may contribute up to 18% of that income, less the pension adjustment, up to a maximum of $19,000.

You may contribute to your RRSP up to the end of the year in which you turn 71. You may then convert your RRSP into a registered retirement income fund (RRIF) or other retirement income.

Depending on your needs and your investment objectives, you have several investment options when you contribute to an RRSP, including:

  • Investment funds
  • Guaranteed interest funds
  • Principal guaranteed with alternative investments
  • Stocks and bonds
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