What is a Registered Retirement Savings Plan (RRSP)?
The Canadian government introduced RRSPs in 1957 as a way for Canadians without employer-sponsored pension plans to save money for retirement. When you add funds to save through an RRSP account, you are making contributions from pre-tax income (meaning the amount of your contribution is deducted from your current income before it is taxed). Your RRSP contributions grow tax-free while they’re in the plan but are taxed on withdrawals. In 2023, the maximum you can contribute to an RRSP is 18% of your earned income to a limit of $30,780.