What’s my RRSP contribution limit?
The RRSP deadline this year
The deadline for contributions during the 2022 tax year is March 1, 2023. Contributions made in the first 60 days of the year can be applied against the previous taxation year.
The types of investments you can hold in an RRSP
You can simply deposit into an RRSP savings account until it builds to several thousand dollars, or you can set up a self-directed RRSP right away. If you prefer to build and manage your own investment portfolio by buying and selling a variety of different types of investments, you should consider a good balanced fund or even an easy passive strategy we call the Couch Potato Portfolio. (Check out our couch potato guide.)
You can hold the following types of investments inside your RRSP:
How and where can you open an RRSP account?
You can choose to open an RRSP with a bank or credit union, which can be a good option for those who want the option of speaking with someone face-to-face. In addition, many financial institutions, including some discount online brokers and robo-advisors, such as Questrade or Wealthsimple, allow you to set up and manage your own RRSP account in minutes online, from the comfort of your couch. Have your social insurance number (SIN) and another piece of identification ready.
You’ll need to transfer funds from an existing account in order to make your first contribution or set up regular direct deposits. If you’re the kind of person who’s always racing to beat the contribution deadline, the latter can make your life easy—it’s a set-it-and-forget-it strategy that ensures you always have a contribution ready for the current tax year.
What is a spousal RRSP?
All or a portion of your RRSP contribution can be made to an RRSP in your spouse’s name. As the contributor, you get the deduction, but your spouse is the owner of the plan. This program includes common-law spouses as defined by the CRA.
Who gets the most benefit from a spousal RRSP? The benefit is greatest if a higher-income spouse or common-law partner contributes to an RRSP for a lower-income spouse or common-law partner. The contributor receives the short term benefit of the tax deduction for the contributions, while the annuitant, who is likely to be in a lower tax bracket during retirement, receives the income and reports it on his or her income tax and benefits return.
What else you can use your RRSP money for?
There are two programs you can use to take money out of an RRSP plan without incurring tax. They are the Home Buyers’ Plan (HBP) and the Lifelong Learning Plan (LLP).
