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What is a Registered Retirement Savings Plan (RRSP)?

Learn the basics of the Registered Retirement Savings Plan (RRSP)

CIBC Investor’s Edge Sep. 16, 2025 3-minute read

A Registered Retirement Savings Plan (RRSP) is a registered plan that encourages Canadians to save for their future. The plan can include a mix of investments, including stocks, ETFs, mutual funds, GICs and more. Each year you have a maximum contribution limit, which includes any unused contribution limits from previous years. You can deduct your yearly contribution from your taxable income, reducing your income tax for the year.

Who should have an RRSP?

Any Canadian between 18 and 71 who earns income should consider taking advantage of the benefits an RRSP offers. If you want to maintain your standard of living during retirement, it’s important to start saving as early as possible. Even if your employer supplements your pension plan with contributions, it may not be enough for the retirement you want.

Benefits of an RRSP

Tax savings now

Every dollar you contribute to an RRSP can reduce your taxable income for that year, which means you pay less tax.

Tax-sheltered growth

Your initial investment and investment earnings continue to grow in your RRSP, sheltered from tax until you withdraw money. This helps you grow your investments and reach your retirement goals sooner.

Flexibility for your goals

The Government of Canada lets you borrow from your RRSP for some of life’s major milestones. You can access funds to buy your first home through the Home Buyers’ Plan Opens in a new window.. If you’re pursuing an education, consider the Lifelong Learning Plan Opens in a new window..

Spousal income splitting

A spouse in a higher tax bracket can contribute to a spousal RRSP in the name of their lower-income spouse. This means the higher-earning spouse can reduce their taxable income now. The retirement income may be taxed at a lower rate when it’s withdrawn from the spousal RRSP, subject to a minimum waiting period.

Both RRSPs and TFSAs (Tax-Free Savings Accounts) are integral pieces of a good financial plan. Find out more about these two important savings and investment options and how they can help you meet your goals.

Learn more about RRSPs and TFSAs

What is a Registered Retirement Savings Plan (RRSP)?

Who should have an RRSP?

Benefits of an RRSP

Tax savings now

Tax-sheltered growth

Flexibility for your goals

Spousal income splitting

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