An RRSP (Registered Retirement Savings Plan) is the Canadian retirement account that gives you a tax deduction when you contribute and taxes the money when you take it out. This guide covers what RRSP means, how it works, the 2026 limit, the tax refund, withdrawals, spousal RRSPs and the age-71 deadline, so you can tell whether an RRSP fits your situation. YieldMaple checked the CRA’s RRSP, spousal RRSP, withdrawal, Home Buyers’ Plan and Lifelong Learning Plan pages, plus CDIC’s coverage page, on September 29, 2026; every RRSP rule and limit below comes from those pages or is calculated from them, and provider fees come from each provider’s own pricing page.
Quick links: RRSP contribution limit 2026 · RRSP deadline · RRSP calculator · TFSA vs RRSP · Wealthsimple RRSP fees and features. New to investing? Start with Canadian investing for beginners.
RRSP rules at a glance
| Item | Current figure | Source |
|---|---|---|
| RRSP dollar limit (2026) | $33,810 | canada.ca Verified October 7, 2026 |
| RRSP dollar limit (2027) | $35,390 | canada.ca Verified October 7, 2026 |
| RRSP room as a share of previous year's earned income | 18% | canada.ca Verified October 7, 2026 |
| Tax on RRSP over-contributions (CRA) | 1% a month on contributions that exceed your RRSP deduction limit by more than $2,000 | canada.ca Verified October 7, 2026 |
| Tax withheld on RRSP withdrawals, residents of Canada (CRA) | 10% on withdrawals up to $5,000, 20% on withdrawals over $5,000 up to $15,000, and 30% on withdrawals over $15,000 (5%, 10% and 15% in Quebec, where provincial tax is also withheld) | canada.ca Verified October 7, 2026 |
| Home Buyers' Plan withdrawal limit (CRA) | $60,000 | canada.ca Verified October 7, 2026 |
| Last day to contribute to your own RRSP (age limit) | December 31 of the year you turn 71 | canada.ca Verified October 7, 2026 |
In plain sentences: the 2026 RRSP dollar limit is $33,810 and the 2027 limit is $35,390. Your own room is 18% of the previous year’s earned income, up to that limit. Going over costs 1% a month on contributions that exceed your RRSP deduction limit by more than $2,000. A regular withdrawal has tax withheld at 10% on withdrawals up to $5,000, 20% on withdrawals over $5,000 up to $15,000, and 30% on withdrawals over $15,000 (5%, 10% and 15% in Quebec, where provincial tax is also withheld). The Home Buyers’ Plan allows up to $60,000 for a first home, and you can contribute to your own RRSP until December 31 of the year you turn 71.
This page is general education, not financial advice.
RRSP meaning: what does RRSP stand for?
RRSP stands for Registered Retirement Savings Plan. The CRA defines it as a retirement savings plan that you set up, that the CRA registers, and that you or your spouse or common-law partner contribute to. “Registered” is the part that matters: registration with the Canada Revenue Agency is what gives the account its tax rules.
Three things define an RRSP:
- Contributions are deductible. Deductible contributions reduce your taxable income for the year you claim them.
- Growth is sheltered. Income earned inside the plan is usually exempt from tax while the money stays in the plan, and you generally pay tax when you receive payments from it.
- Withdrawals are taxed as income. Whatever you take out is added to your income for that year.
An RRSP is an account, not an investment. You open one at a financial institution such as a bank, credit union, trust or insurance company, and it can hold cash, GICs, ETFs, stocks, bonds or mutual funds. You can hold RRSPs at more than one institution, but they all share one deduction limit.
How does an RRSP work?
An RRSP works as a simple cycle: you contribute within your limit, deduct the contribution, let the investments grow untaxed, and pay tax when you withdraw.
- Open an RRSP at a bank, credit union, brokerage or robo-advisor. A self-directed RRSP lets you pick the investments; a managed one invests for you.
- Contribute up to your RRSP deduction limit. The CRA calculates it as unused room carried forward, plus the lesser of 18% of last year's earned income and the annual RRSP limit, minus your pension adjustment.
- Deduct the contribution on your tax return (line 20800). The deduction lowers your taxable income, which usually means a refund or a smaller balance owing.
- Invest inside the account. Interest, dividends and capital gains are not taxed while they stay in the plan.
- Withdraw later, usually in retirement. Each withdrawal is added to that year’s income.
- Convert by 71. In the year you turn 71 you must withdraw the money, transfer it to a RRIF, or use it to buy an annuity.
The trade-off is timing. You skip tax in the year you contribute and pay it in the year you withdraw, so the RRSP works best when your tax rate at withdrawal is lower than your rate when you contributed.
How much can you contribute to an RRSP in 2026?
For 2026 you can contribute the lesser of 18% of your 2025 earned income and $33,810, plus unused room from earlier years, minus any pension adjustment.
Worked examples (no pension plan, no carried-forward room):
- 2025 earned income of $50,000: 2026 room of $9,000
- 2025 earned income of $100,000: 2026 room of $18,000
- 2025 earned income of $200,000: 18% would be $36,000, so room is capped at $33,810
- Earned income needed to reach the 2026 cap: about $187,833
Unused room carries forward with no expiry date, so someone who skipped contributions for years can have far more room than one year’s limit. For comparison, the 2025 dollar limit was $32,490 and the 2027 limit is $35,390.
Where to find your exact number: the RRSP Deduction Limit Statement on your latest notice of assessment, or CRA My Account. The RRSP contribution limit guide walks through the formula line by line.
What happens if you over-contribute?
Over-contributing costs 1% a month on contributions that exceed your RRSP deduction limit by more than $2,000. The tax keeps running each month until the excess is withdrawn or absorbed by new room.
How big is the RRSP tax refund?
The RRSP refund is roughly your contribution multiplied by your marginal tax rate, because each deducted dollar comes off the top of your taxable income.
Illustrative marginal rates (your real rate depends on your province and income):
- At a 20% marginal rate, a $10,000 contribution saves about $2,000 in tax
- At a 30% marginal rate, the same $10,000 saves about $3,000
- At a 40% marginal rate, it saves about $4,000
Two details matter. First, you don’t have to claim the deduction in the year you contribute: unused contributions can be carried forward and deducted in a higher-income year. Second, the refund is only part of the benefit; what you do with it decides whether the RRSP beats simply paying the tax. The RRSP calculator runs the numbers for your bracket.
When is the RRSP deadline?
RRSP contributions for a tax year are due on or before the day that is 60 days after the end of the tax year, which puts the deadline for the 2026 tax year at March 1, 2027.
For the 2025 tax year, the CRA’s posted deadline was March 2, 2026. Contributions made in the first 60 days of a year can go on either the previous year’s return or a later one. Missing the deadline doesn’t lose the room; it only pushes the deduction to the next year. Full dates are in the RRSP deadline guide.
Spousal RRSP: how does it work?
A spousal RRSP is an RRSP your spouse or common-law partner owns and you contribute to: you get the deduction, and your spouse is taxed on withdrawals. The CRA describes the benefit this way: the contributor gets the tax deduction, and the annuitant spouse or common-law partner, likely in a lower bracket in retirement, receives and reports the income.
The CRA’s spousal RRSP rules:
- It uses your room, not theirs. Your contributions to a spousal RRSP use up your own RRSP deduction limit — your contributions to your RRSP and your spouse's RRSP together can't be deducted beyond that one limit. In the CRA’s own example, Michel's 2025 RRSP deduction limit was $10,000; he contributed $4,000 to his own RRSP and $6,000 to his common-law partner's RRSP, all counted against that one limit.
- Your spouse owns the account. Your spouse is the annuitant: withdrawals are paid to them, and outside the three-year rule below they report the income.
- The three-year rule. To keep a withdrawal taxed in your spouse’s hands, the CRA says you must not have contributed to any spousal RRSP in the year your spouse or common-law partner withdraws the money or either of the two years before it — otherwise the contributor will probably have to report the withdrawal as income. The annuitant files Form T2205 to work out who reports what.
- Age limit follows your spouse. You can contribute to a spousal RRSP until December 31 of the year your spouse or common-law partner turns 71, even if you are past 71 yourself.
- No moving your own RRSP in. Transferring your RRSP to a spousal RRSP is not allowed — funds in your RRSP can't be transferred to a spousal or common-law partner RRSP.
Who a spousal RRSP suits: couples where one partner expects much higher retirement income than the other. It moves future RRSP income to the lower-income partner. It also lets an older contributor keep making deductible contributions after 71 if the spouse is younger.
Wealthsimple offers spousal RRSPs in both managed and self-directed versions; the Wealthsimple RRSP guide covers fees, transfers and the spousal option.
How are RRSP withdrawals taxed?
An RRSP withdrawal is added to your income for the year and taxed at your marginal rate, with part of the tax withheld up front.
The institution withholds 10% on withdrawals up to $5,000, 20% on withdrawals over $5,000 up to $15,000, and 30% on withdrawals over $15,000 (5%, 10% and 15% in Quebec, where provincial tax is also withheld). That withholding is a prepayment, not the final bill. The CRA says the tax withheld may not be enough to cover the tax you owe at your tax bracket, so you may owe more when you file your return. Non-residents have 25% unless reduced by a tax treaty withheld.
Worked example: a single withdrawal of $20,000 falls in the top tier, so the institution withholds $6,000 and you receive $14,000. At tax time the full $20,000 is added to your income; if your marginal rate is above 30% you owe the difference, and if it is below you get some back. A regular withdrawal also doesn’t give you back the contribution room it used, unlike a TFSA withdrawal.
Home Buyers’ Plan (HBP)
The Home Buyers’ Plan lets a first-time home buyer withdraw up to $60,000 from an RRSP to buy or build a qualifying home, with no tax as long as it is repaid over 15 years.
- You need a written agreement to buy or build the home at the time of the withdrawal.
- The home must be bought or built before October 1 of the year after the year of your first withdrawal.
- Under the CRA’s current relief, repayments start in the fifth year after the year of your first withdrawal (for a first HBP withdrawal made from January 1, 2026 to December 31, 2028), so a first withdrawal in 2026 is first repaid in 2031.
- Missed repayments are added to your income for that year.
- Combining the HBP with an FHSA for the same home is allowed — you can make an HBP withdrawal and a qualifying FHSA withdrawal for the same qualifying home if you meet the conditions of each. With the FHSA’s $40,000 lifetime contribution limit, one buyer can put $100,000 of RRSP and FHSA money toward the same home, plus any growth earned inside the FHSA.
Full details: RRSP Home Buyers’ Plan and FHSA explained.
Lifelong Learning Plan (LLP)
The Lifelong Learning Plan lets you withdraw $10,000 a calendar year for full-time education for you or your spouse, up to $20,000 each time you participate, repaid generally within 10 years. No tax is withheld on LLP withdrawals that meet the conditions.
What happens to your RRSP at 71?
By the end of the year you turn 71 you must close out your RRSP: withdraw the money, transfer it to a RRIF, or use it to buy an annuity. The last day to contribute to your own RRSP is December 31 of the year you turn 71.
- RRIF (Registered Retirement Income Fund). The most common choice. The money stays invested and you take a minimum amount out each year.
- Annuity. You exchange the balance for guaranteed payments for life or a set term.
- Full withdrawal. The entire balance is added to that year’s income, which can push most of it into a high bracket.
The CRA notes that no tax is withheld on amounts transferred directly to a RRIF or used to buy an annuity; you pay tax later on the payments you receive.
Is money in an RRSP protected?
Yes, within limits: CDIC insures eligible deposits in an RRSP at a member bank, and CIPF covers investments if a member dealer fails.
- CDIC (cash and GICs): covered up to $100,000, including principal and interest, on eligible deposits held in an RRSP at a CDIC member — a separate category from deposits in your own name or in a TFSA. CDIC does not cover mutual funds, stocks, bonds, ETFs and cryptocurrencies.
- CIPF (investments at a dealer): CIPF’s limits are $1 million for all general accounts combined (such as cash, margin, TFSA and FHSA accounts), plus $1 million for all registered retirement accounts combined (such as RRSPs, RRIFs and LIFs), plus $1 million for RESPs where you are the subscriber.
Neither program protects you from a market drop. The RRSP itself is only a tax wrapper; the risk depends on what you hold inside it.
What can you hold in an RRSP?
An RRSP can hold cash, GICs, ETFs, Canadian and US stocks, bonds and mutual funds, the same broad range as a TFSA.
- Cash and GICs for money you need to keep stable.
- ETFs for low-cost diversified investing; all-in-one ETFs hold thousands of stocks in one fund.
- Individual stocks and bonds in a self-directed RRSP.
- Mutual funds, where fees vary widely: mutual fund MERs range from less than 1% to more than 3%, per the Ontario Securities Commission.
US dividends and the RRSP: under the Canada–US tax treaty, dividends paid to a retirement plan are exempt from US tax, as long as the plan is operated exclusively to provide pension, retirement or employee benefits, and the US Treasury's technical explanation of the 2007 Protocol uses a Canadian RRSP as its example of a retirement arrangement described in that exemption. That is why some investors hold US-listed ETFs directly in an RRSP rather than in a TFSA, where foreign dividends could be subject to foreign withholding tax, per the CRA's TFSA guide. A native US-dollar RRSP avoids a currency conversion on each purchase; at Questrade, you can hold USD in registered accounts, so US trades don't force a conversion.
RRSP vs TFSA
The two main Canadian registered accounts work in opposite directions:
| Feature | RRSP | TFSA |
|---|---|---|
| Contribution deductible? | Yes | No |
| Growth taxed? | Deferred until withdrawal | Never |
| Withdrawals taxed? | Yes, as income | No |
| 2026 new room | 18% of 2025 earned income, up to $33,810 | $7,000 |
| Room back after a withdrawal? | No | Yes, the next January |
| Age limit | Contributions end in the year you turn 71 | None |
How the choice usually breaks down: the RRSP comes out ahead when your tax rate at withdrawal is lower than your rate when you contributed; the TFSA comes out ahead when it is the same or higher. Many Canadians use both. The full comparison is in TFSA vs RRSP, and the TFSA explained guide covers the other account.
Where to open an RRSP
You can open an RRSP at almost any bank, credit union, brokerage or robo-advisor. The main choice is self-directed (you pick the investments) versus managed (the provider invests for you).
Self-directed RRSPs (ETFs and stocks):
- Wealthsimple Trade RRSP — $0 commission on listed Canadian and US stocks and ETFs. See the Wealthsimple RRSP guide for plan fees and transfer details, and the complete Wealthsimple guide for the rest of the platform.
- Questrade RRSP — $0 to buy and sell Canadian and U.S.-listed stocks and ETFs.
Cash RRSPs:
- EQ Bank RRSP Savings Account — 1.50% interest, per EQ Bank’s rates page.
GIC RRSPs: most banks and credit unions sell RRSP-eligible GICs; rates change often, so compare them on the day you buy.
For a side-by-side of providers, see the best RRSP account in Canada.
Common RRSP mistakes
- Spending the refund without a plan. The refund is deferred tax, not a bonus. Putting it back into an RRSP or TFSA keeps the benefit working.
- Contributing heavily at a low income. If your tax rate in retirement will be the same as today, the RRSP’s deduction mostly comes back as tax later, and a TFSA may do the same job with more flexibility.
- Paying high fees. Mutual fund MERs range from less than 1% to more than 3%, and that cost comes off returns every year.
- Borrowing to contribute without the math. Interest on an RRSP loan is not deductible — the CRA lists interest on money borrowed to contribute to an RRSP among the amounts you can't deduct, so the loan only pays off if the refund and growth beat the interest.
- Withdrawing early. A regular withdrawal is taxed, has tax withheld up front and doesn’t give back the room it used.
- Over-contributing. It costs 1% a month on contributions that exceed your RRSP deduction limit by more than $2,000.
- Forgetting the spousal three-year rule. A withdrawal too soon after a contribution is generally taxed in the contributor’s hands.
The verdict: who an RRSP suits
The RRSP is strongest for people who expect a lower tax rate in retirement than during their working years, who have unused room, and who will leave the money invested for the long term. It is weaker for people with low current income, people who may need the money soon, and anyone who expects a higher tax rate later. Couples with very different incomes get an extra lever in the spousal RRSP.
Sources
- Canada Revenue Agency: RRSPs and related plans
- CRA: how contributions affect your RRSP deduction limit
- CRA: contributing to your spouse’s or common-law partner’s RRSPs
- CRA: withdrawing from spousal or common-law partner RRSPs
- CRA: tax rates on RRSP withdrawals
- CRA: the Home Buyers’ Plan
- CDIC: what’s covered
Read next
- RRSP contribution limit — the formula and your exact room
- RRSP deadline — the 60-day rule and dates
- RRSP calculator — project your refund and retirement value
- Wealthsimple RRSP — fees, managed vs self-directed, spousal RRSPs
- RRSP Home Buyers’ Plan — first-home withdrawals
- TFSA vs RRSP — which account to fund first
- Best RRSP account in Canada — where to open one
- FHSA explained — the first-home account