What is RRSP?
Also known as: Registered Retirement Savings Plan
Definition
Educational information only. Last reviewed August 25, 2026.
How it works in Canada
Contribution room accrues based on earned income, subject to an annual maximum set by the CRA, and unused room carries forward. Withdrawals are added to income in the year received and most attract withholding tax. An RRSP must be converted to a RRIF or an annuity by the end of the year the holder turns 71.
Example
A Canadian earning $120,000 who contributes $15,000 reduces taxable income for that year by $15,000. If they later withdraw in retirement at a lower marginal rate, the deferral has produced a tax benefit.
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Written and reviewed by CanadaGFI.ca Editorial Team
Licensed insurance and financial professionals contributing to CanadaGFI.ca
Published and last reviewed August 25, 2026. Read our editorial policy and disclosures.
This page is educational information about Canadian financial concepts. It is not personalized financial, tax, insurance or legal advice, and it does not consider your individual circumstances. Product availability, eligibility, pricing and tax treatment depend on the provider, your situation and current Canadian rules. Speak with a professional licensed in your province before acting.
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