RRSP Account
A Registered Retirement Savings Plan (RRSP) is a powerful, tax-advantaged savings account designed to help Canadians build a secure retirement.
A Registered Retirement Savings Plan (RRSP) is a powerful, tax-advantaged savings account designed to help Canadians build a secure retirement. Whether you’re just starting your career or planning for your golden years, an RRSP lets you grow your money faster by deferring taxes until retirement — when your income and tax rate may be lower.
At iRateCompare, we help you understand, open, and invest in the right RRSP to match your financial goals.
A Registered Retirement Savings Plan (RRSP) is a special savings account registered with the Canadian government, designed to help you save for retirement. Here’s how it works:
1. You Contribute Pre-Tax Income: Contributions to your RRSP are tax-deductible — meaning they reduce your taxable income for the year.
2. Your Money Grows Tax-Free:
Investments inside your RRSP (like mutual funds, stocks, GICs) grow without being taxed while in the account.
No tax on interest, dividends, or capital gains until you withdraw the funds.
3. Withdrawals Are Taxed (Later)
When you withdraw money from your RRSP — usually during retirement — it is taxed as income.
4. Contribution Limits Apply
You can contribute up to 18% of your previous year’s income, up to an annual maximum (e.g., $31,560 for 2024).
Unused contribution room carries forward indefinitely.
5. Use for Special Programs
Home Buyers’ Plan (HBP): Withdraw up to $35,000 to buy your first home, tax-free (must repay within 15 years).
Lifelong Learning Plan (LLP): Withdraw up to $10,000/year to pay for education or training.