Registered retirement savings plan (RRSP)

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Reviewed by Paul Thorne

An RRSP is one of the most popular retirement savings accounts in Canada. Not only can an RRSP help you save for retirement, it can also give you a tax break.

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What’s an RRSP?

An RRSP is a type of registered savings account. When you contribute to your RRSP, you get two important tax benefits:

1. Lower your taxable income today.

You can deduct your RRSP contributions (up to your RRSP deduction limit) from your total income to reduce your income subject to tax.

2. Withdraw at a lower tax rate later.

Your contributions and investments grow tax-free in your account until you withdraw them. When you withdraw them (and any growth on them) in retirement, you may have a lower income. A lower income means that you may get to pay tax at a lower tax rate on the amount you withdraw. Even if you’re at the same taxable income, you’ve benefitted from the tax-free growth while invested.

Extra benefits of an RRSP

Hold a variety of investments

Like segregated fund contracts, mutual funds, GICs, ETFs, stocks, bonds, and more 1.

Pay for a home or return to school

The Home Buyers’ Plan and Lifelong Learning Plan let you borrow some money from your RRSP tax-free   before retirement.

Unused deduction room is carried forward

You can make up for missed contributions from previous years and maximize your savings until December 31 of the year you turn 71.

Helpful RRSP numbers to know

$32,490

Maximum 2025 RRSP dollar limit created by the previous year's earned income. 

$60,000

Maximum amount you can borrow from your RRSP to buy your first home.

$10,000

Maximum amount you can borrow from an RRSP per calendar year to help pay for training or education (up to a lifetime maximum of $20,000).

71

By the end of the year you turn age 71, contributions to your RRSP stop. You have 3 options (any of which can be used alone or with the other options). You can convert your RRSP to a RRIF, or you can purchase an annuity, or you can make a withdrawal.

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Video: What is an RRSP?

Watch time: 1 minute 23 seconds

In this “Simply Put” video, learn the basics about RRSPs – and how an RRSP can help you save for retirement.

What is an RRSP?

Simply put, a Registered Retirement Savings Plan, or RRSP, is a type of savings account that helps Canadians save for their retirement.

How does an RRSP work?

You can hold a variety of investments in your RRSP, like:

Any contributions or growth within your RRSP help you defer taxable income. This means you can defer taxes this year when you contribute, and defer taxes on any investment growth, until you choose to access the funds. For most, withdrawing from your RRSP at a later point in life means paying less tax.

Think of it this way: you’ll probably be in a lower tax bracket when you’re retired in your 60s or 70s. So you’ll be paying less tax when you withdraw from your RRSP at that age.

What’s your RRSP contribution limit?

Your yearly contribution limit is 18% of your earned income, plus unused room from earlier years. Any money you put into an RRSP, up to the limit, reduces your taxable income for that year.

Your RRSP contribution limit is calculated each year and will appear on the Notice of Assessment you receive after filing your taxes.

For more tips and tools, visit sunlife.ca.

Is an RRSP right for me?

  • You're in a higher income tax bracket than when you plan to withdraw money. 
  • You wish to save for your retirement on a tax-deferred basis. 
  • You want to have funds to help you buy a home, or to help pay for education for yourself, your spouse, or common-law partner.2 
  • You know and are aware of the RRSP contribution limits,2 including the maximum you can contribute each year. 
  • You want to explore options for lowering your household taxes with your spouse or common-law partner in retirement.2 

  • You have other shorter-term savings objectives. 
  • You don’t have any RRSP contribution room. 
  • You turned age 71 this year – you can only hold and contribute to an RRSP until the end of the year you turn age 71. By the end of the year you turn age 71, you have 3 options (any of which can be used alone or with the other options). You can convert your RRSP to a RRIF, or you can purchase an annuity, or you can make a withdrawal. However, if you have a spouse or common-law partner who will not turn age 72 or older during the year, you can contribute to a spousal RRSP if you have unused RRSP contribution room. 

Why open an RRSP with Sun Life

Here are 3 benefits to opening an RRSP with Sun Life:

Range of competitive products

We offer professionally managed investment products across a range of categories that can be used in a portfolio to suit your individual needs.

Save time

You might not have the time to build and maintain a portfolio. We can help.

Expert support

You have access to our team of advisors to help you determine which products suit your risk tolerance, investment objectives, and lifestyle goals.

RRSP investment options at Sun Life

Build an investment portfolio with the right mix of investments like mutual funds, segregated funds, GICs, and more.

Mutual funds

A mutual fund combines the money from many investors into a pool. These pools of money are invested in stocks, bonds, or other securities. Each pool is managed by a professional investment manager.

Learn more about mutual funds

Guaranteed interest products

We offer two types: trust GICs and insurance GICs. Your principal and interest are guaranteed, safeguarding you from changes in the market.

Learn more about guaranteed interest products

Segregated fund contracts

A segregated fund contract is an investment fund that combines the growth potential of a mutual fund with the estate planning benefits of a life insurance contract. These contracts offer guarantees and some additional benefits which can help protect your investments.

Learn more about segregated funds

Annuities

A payout annuity offers guaranteed income for life or a specified period. To help meet your retirement income needs, you might want to purchase a payout annuity to get guaranteed income from your RRSP.

Learn more about payout annuities

Exchange Traded Funds (ETFs)

ETFs are investment products that track an index or a basket of securities (generally stocks and bonds) that trade daily on an exchange. Like stocks, ETFs can be traded throughout the day on a designated exchange.

RRSP basics

What are RRSPs and how do they work?

Find out about your RRSP contribution limit, what happens if you over-contribute, what happens to unused contribution room, and more.

What's an RRSP?

RRSP contribution deadline

The RRSP contribution deadline to dedcut for the 2025 tax year is March 2, 2026.

Understand why this date matters and how contributing before or after this date affects your tax return.

RRSP contribution deadline

RRSP contribution limit

Find out about your RRSP contribution limit, what happens if you over-contribute, what happens to unused contribution room, and more.

RRSP contribution limits

RRSP withdrawals and taxes

Learn more about RRSP withdrawals, related withholding taxes, and more.

RRSP withdrawals

Other types of RRSPs

Apart from personal RRSPs, there are 2 other types of RRSPs you’ll come across: spousal RRSPs and group RRSPs. But regardless of what type of RRSPs you have and how many you have, you’re still responsible for staying within your contribution room.

Spousal RRSPs

A spousal RRSP lets you contribute and save money for your spouse or common-law partner. You contribute, up to your contribution room and you get to claim the RRSP deduction, but your spouse or common-law partner owns the RRSP, not you.

Learn more about spousal RRSPs

Group RRSPs

A group RRSP is a retirement savings plan offered through an employer. Your contributions are made by a payroll deduction. In some cases, your employer may also contribute.

Learn more about group RRSPs

More resources

How much will you have saved in your RRSP when you retire?

Are you saving enough in your RRSP? Find out in just a couple of minutes.

Try the RRSP calculator

I’m turning 71 this year. What do I do with my RRSP?

You might know about the deadline for closing your RRSP. But do you know what to do with the money?

RRSP options when you turn 71

5 RRSP mistakes and how to avoid them

Ready for RRSP season? Here are some tips on what not do with your RRSPs.

Avoid these RRSP mistakes

This information is meant for educational and illustrative purposes only. Some conditions, exclusions and restrictions apply.

Legal notes:

1 Note: Not all products are available for distribution through Sun Life Advisors

2 See a tax advisor for assistance.

Last updated: January 13, 2026

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