Registered Investments

What is a RRSP?

A Registered Retirement Savings Plan (RRSP) is a government approved plan that enables you to save money for your retirement. RRSPs give you security knowing that you will have a head start on your retirement savings.
Annual contribution limits are based on your previous year's earned income.

An RRSP accumulates investment returns tax-free and contributions reduce annual taxable income. They can also be accessed to purchase a home through the Home Buyers' Plan or for further education (Lifelong Learning Plan).

A few other things to know:
  • Annual contribution limits apply
  • Unused contribution room can accumulate
  • Tax is deferred
  • Withdrawals will be included as taxable income for that tax year
  • RRSPs must be collapsed by the end of the calendar year that you turn 71

Your contributions are tax deductible and income is tax sheltered until you remove funds from your plan. Early withdrawals (before the age of 71) will be subject to a withholding tax, which is taken at the time of the withdrawal and paid directly to the government on your behalf.

What is a RRIF?


By the end of the calendar year in which you turn 71, and RRSP held by you must either be redeemed in full, transferred to an annuity or be converted to a Registered Retirement Income Fund (RRIF).

A RRIF puts you in control of your investment and the amount of income it pays you. A RRIF provides the annuitant with periodic income which is taxed at the effective rate for the year of the receipt. Although you can set the payment amount, frequency and investment options of your RRIF, there is a minimum annual withdrawal amount set by the Canada Revenue Agency.

Funds within an RRIF will continue to be income tax sheltered, but you will pay income tax on the withdrawal amounts. Withholding tax may be deducted from your RRIF payment depending on the amount of withdraws. If you withdraw the minimum amount required per year, no withholding tax will be deducted.
 

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