Registered Retirement Saving Plan

Learn About Our RRSP Options To Help You Get To Where You Want To Go


Whatever your age or personal situation, it’s never too late to take advantage of the benefits a Registered Retirement Savings Plan (RRSP) can offer. It is important to understand RRSP basics to ensure you choose the right investment options for your RRSP.

A Registered Retirement Savings Plan (RRSP) is a personal savings plan registered with the Canadian federal government allowing you to save for the future on a tax-sheltered basis. This means that any income you earn in the Registered Retirement Savings Plan is usually exempt from tax as long as funds remain in the plan. Both you and your spouse or common-law partner can contribute to RRSP. You have to pay tax only when you withdraw money from it. That generally happens when you are retired and at that time, you are in a lower tax bracket anyway. Moreover, you can carry your unused contribution limit from one year to another. By investing in registered retirement savings plan in income rich years and withdrawing in others, RRSP allows you to postpone your income tax obligations to a later date. An experienced financial advisor at Majdoub Group Financial Services, Ottawa, can help you determine how much to contribute and when so that you get maximum value for your earnings.

An RRSP is an investment portfolio – your designated retirement savings. It can contain a variety of investments including: RRSP savings deposits, treasury bills, guaranteed investment certificates (GICs), mutual funds, bonds, and even equities.

An RRSP has various tax advantages. What makes an RRSP special is that your contributions to it are tax deductible and your portfolio grows tax sheltered. If you are under 72 years of age and earn income, we encourage you to take advantage of the benefits an RRSP can offer. RRSP is also a great option when one spouse’s earnings fall in the higher tax bracket than the other. The spouse earning more can invest in RRSP and get income taxed at the hands of the lower income spouse.

Every individual who works, files a Canadian income tax return, and looks forward to secure retirement should consider having an RRSP. Your financial planner can help you understand how much to invest in a registered retirement savings plan and at what time.

Here’s why RRSP’S are worth investing in:

  • People who earn income through their employment or self-employment, can reduce their annual tax bill while saving for their future through an RRSP.
  • For people who have a company pension plan, RRSPs add extra comfort that their retirement needs are met; for those that don’t have company pension plans, RRSPs may be the foundation for funding their retirement.
  • Married couples where one spouse earns more income than the other can reduce their combined tax burden through a spousal RRSP. At retirement, an income-splitting strategy can be applied to reduce overall tax when the funds are withdrawn.
  • If you are planning on purchasing your first home or are interested in continuing your education, you can contribute to your RRSP, then use these funds as a source of financing.
  • If you anticipate fluctuations in your income because of maternity leave, career change or employment interruptions, the funds in an RRSP are always available to you.

RRSP’S provide a lifetime of benefit:

  • By contributing to an RRSP throughout your working career, you’ll realize immediate tax benefits at a time when your income is generally highest. The total amount of your annual contribution can be deducted from your gross income at tax time, reducing the amount you pay in income tax that year.
  • The income earned in your RRSP is not taxed until it is withdrawn. While your investments sit in your RRSP, their growth is tax sheltered and so the total value may grow more quickly.
  • By the time you begin to withdraw the funds at retirement, you will probably be in a lower tax bracket than during your earning years. Funds withdrawn at that time will benefit from this lower tax rate.
  • Special features of RRSPs allow you to do further tax planning or use your RRSP to fund specific life events.