Registered Retirement Savings Plan (RRSP) for Beginners
A Registered Retirement Savings Plan (RRSP) is a Canadian registered account designed for retirement savings. Contributions may reduce taxable income today, while withdrawals are generally taxable later.
How RRSP tax treatment works
When you contribute to an RRSP, you may be able to claim a deduction on your Canadian tax return. The investments inside the account can grow tax-deferred. When money comes out later, withdrawals are generally included in taxable income.
How RRSP contribution room is calculated
The Canada Revenue Agency says your RRSP deduction limit is generally based on unused room from prior years plus the lesser of 18% of earned income from the previous year or the annual RRSP dollar limit, adjusted by pension factors and other items.
| Rule | Beginner version |
|---|---|
| 2026 RRSP dollar limit | The official RRSP dollar limit for 2026 is $33,810. |
| Personal limit | Your personal limit may be lower or higher because unused room and pension adjustments matter. |
| Where to find it | Check your latest notice of assessment, reassessment, or Canada Revenue Agency account. |
| Age limit | You can generally contribute until December 31 of the year you turn 71 if you have available room. |
When an RRSP may fit
- You are in a higher income year and want to reduce taxable income.
- You expect to withdraw in retirement at a lower tax rate.
- You can invest the tax refund instead of spending it.
- You have stable emergency savings and high-interest debt under control.
Common RRSP mistakes
Your personal room matters more than a headline annual limit.
RRSP money is not tax-free. It is generally tax-deferred.
Retirement accounts are not a substitute for accessible cash.
If you are comparing an RRSP with a Tax-Free Savings Account, start with the TFSA vs RRSP guide.