An RRSP is a Canadian retirement account where contributions are tax-deductible and investments grow tax-deferred, with tax paid when money comes out.
Your yearly room is 18% of your previous year's earned income, up to a dollar limit, minus any pension adjustment from a workplace pension. The limit is C$33,810 for 2026 and C$35,390 for 2027, and unused room carries forward. Contributions made early in the year can count for the year before: the deadline for the 2025 tax year was March 2, 2026.
Withdrawals are added to your income and taxed that year, so an RRSP pays off most when your tax rate in retirement is lower than when you contributed. The Home Buyers' Plan is the main exception: it lets you take money out tax-free for a first home, as long as you pay it back.
You have to wind up an RRSP by the end of the year you turn 71: cash it out, buy an annuity, or, most often, move it to a RRIF. Contributing more than your limit plus a C$2,000 cushion costs 1% a month on the excess.
How to check
Your RRSP deduction limit for the year is printed on your latest notice of assessment from the CRA.
Sources
- Canada Revenue Agency, MP, DB, RRSP, DPSP, ALDA, TFSA limits, YMPE and the YAMPE (page modified October 28, 2026)
- Canada Revenue Agency, T4040 RRSPs and Other Registered Plans for Retirement (2025 tax year)
- Canada Revenue Agency, Options for your own RRSPs when you turn 71 (page modified January 3, 2025)
Related terms
Looking for an advisor? Browse fee-only advisors by location or specialty.