What is an RRSP?
A Registered Retirement Savings Plan (RRSP) is a retirement savings plan that you establish, that the Canada Revenue Agency (CRA) registers, and to which you or your spouse or common-law partner contribute. Deductible RRSP contributions can be used to reduce your tax. Any income you earn in the RRSP is usually exempt from tax as long as the funds remain in the plan. You generally have to pay tax when you receive payments from the plan.
Setting up an RRSP
The official page lists "Setting up an RRSP" but does not provide details. Typically, you set up an RRSP through a financial institution such as a bank, credit union, insurance company, or investment firm. For specific requirements, consult the institution or the CRA website.
Contributing and Deducting
You can contribute to an RRSP, PRPP, or SPP for yourself or your spouse or common-law partner and claim the deduction. Your contribution limit is based on your income and is shown on your Notice of Assessment. The official page does not list specific limits; refer to your CRA notice.
Withdrawals and Tax
Withdrawing funds from an RRSP has tax implications. Generally, the amount withdrawn is added to your income for the year. The page also mentions "RRSP tax-free withdrawal schemes" and notes that anti-avoidance rules have been strengthened to prevent aggressive tax planning.
Receiving Income
Income from an RRSP must be reported and is taxable. You can convert your RRSP to a RRIF or other options, but the official page does not provide details.
Other Situations
- Transfers: The page mentions transferring retiring allowances, lump-sum payments, property, and commutation payments, but no details.
- Death: If the RRSP annuitant dies, there are tax implications.
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