Your RRSP questions, answered
What is an RRSP?
A Registered Retirement Savings Plan (RRSP) is a tax-deferred savings plan designed to help you meet your retirement savings goals. Within an RRSP, you can choose to invest in variable savings, GICs, as well as mutual funds, stocks, or bonds.
How much can I contribute?
The Federal government allows you to contribute up to 18% of your gross income each year (visit our RRSP page for maximum contribution limits). If you contribute to a company pension, this counts toward your total contribution limit. And, if you haven’t maxed out your contributions from previous years you may have more contribution room available. Check your CRA Notice of Assessment, which will tell you how much you can add to your RRSP. You can also access this information through the CRA secure portal: canada.ca/en/revenue-agency.html
When is the contribution deadline?
The deadline for contributing to your RRSP for the tax year is always in early March of the following year.
If I’ve maxed out my contributions for the current tax year, can I still contribute in January and February of the following year?
Yes. Contributions made in January and February can count for either contribution year.
Should I change my investment mix within my RRSP as I get older?
A good rule of thumb is to review your investment mix every one to three years, or any time you experience a significant life change. The best way to decide how to invest is to speak with a Credential Securities advisor or Credential Asset Management Inc. at SCU. They'll work with you to understand your goals and timeline, and help you choose the products that will best serve your unique needs.
Does an RRSP offer tax-free savings?
No, RRSPs are tax deferred, meaning you will be taxed when you withdraw the funds. Any of your earnings in an RRSP, whether interest, dividends, or capital gains are also tax deferred, meaning you don’t pay tax at the time you earn. Contributing to an RRSP when your income is higher means you’ll enjoy tax savings at the time of contribution. Then, when you withdraw the funds, your income will be generally lower, so you’ll pay less tax overall.
Can I automate my RRSP contributions?
Yes, you have the option to self-manage your contributions through digital banking, setting up regular, preauthorized transfers directly to your RRSP account. To get started, simply give us a call at 1.800.728.6440.
How else can I maximize my RRSP contributions?
An investment loan can help you meet your RRSP goals by providing easy access to funds whenever you are ready to invest. With interest charged only on the outstanding balance and a low borrowing cost for our members, a Registered Investment Loan or Link Line is the perfect solution to help you maximize your contribution. Setting up your Link Line now means you will be ready to purchase RRSPs well before the deadline.
Take the next step
If you'd like to get started, you can open an RRSP online today.
Mutual funds are offered through Credential Asset Management Inc. Mutual funds and other securities are offered through Credential Securities, a division of Credential Qtrade Securities Inc. Credential Securities is a registered mark owned by Aviso Wealth Inc. This article is provided as a general source of information and should not be considered personal financial or investment advice or solicitation. The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete.