Max deduction: $15,300.00 (18% of income or $33,810.00, whichever is less)
RRSP Contribution
$10,000.00
Tax Savings
$2,965.00
Effective Cost
$7,035.00
Your $10,000.00 contribution only costs you $7,035.00 after tax savings
Marginal Rate
29.6%
Projected Balance
$581,563.83
| Year | Contribution | Growth | Balance |
|---|---|---|---|
| 1 | $10,000.00 | $600.00 | $10,600.00 |
| 2 | $20,000.00 | $1,836.00 | $21,836.00 |
| 3 | $30,000.00 | $3,746.16 | $33,746.16 |
| 4 | $40,000.00 | $6,370.93 | $46,370.93 |
| 5 | $50,000.00 | $9,753.19 | $59,753.19 |
| 10 | $100,000.00 | $39,716.43 | $139,716.43 |
| 15 | $150,000.00 | $96,725.28 | $246,725.28 |
| 20 | $200,000.00 | $189,927.27 | $389,927.27 |
| 25 | $250,000.00 | $331,563.83 | $581,563.83 |
Assumes 6% annual return compounded yearly with $10,000.00/year contribution. Actual returns will vary. Past performance does not guarantee future results.
What is the RRSP contribution limit for 2025?
For 2025, the RRSP contribution limit is 18% of your previous year's earned income, up to a maximum of $33,810. You can find your exact room on your CRA Notice of Assessment or by logging into My Account. Unused contribution room carries forward indefinitely, so if you did not contribute in previous years, your room may be significantly higher.
What is the Home Buyers' Plan (HBP)?
The HBP lets first-time home buyers withdraw up to $60,000 from their RRSP (tax-free) to buy or build a qualifying home. The amount must be repaid to your RRSP over 15 years, starting the second year after withdrawal. If you do not repay the minimum annual amount, it is added to your income and taxed. Both partners can use the HBP if both qualify.
What is the Lifelong Learning Plan (LLP)?
The LLP allows you to withdraw up to $10,000 per year (max $20,000 total) from your RRSP to finance full-time education or training for you or your spouse. Repayment must begin the fifth year after your first withdrawal, spread over no more than 10 years. The education program must last at least 3 consecutive months and require at least 10 hours per week of courses.
RRSP vs TFSA -- which is better?
It depends on your tax situation. RRSP is better when your current marginal rate is higher than your expected rate in retirement (you get a bigger deduction now than tax you pay later). TFSA is better when your income is lower or you expect to be in the same or higher bracket in retirement. Many advisors recommend maxing both if possible. The TFSA annual limit is $7,000.
What happens if I over-contribute?
CRA allows a $2,000 over-contribution buffer with no penalty. Beyond that, you pay a 1% per month tax on the excess amount until it is withdrawn. Over-contributions do not earn any tax deduction. Always check your contribution room before making large deposits, especially if you have employer pension plan adjustments (pension adjustments reduce RRSP room).
When must I convert my RRSP to a RRIF?
You must close your RRSP by December 31st of the year you turn 71. At that point, you can convert it to a Registered Retirement Income Fund (RRIF), purchase an annuity, or withdraw the full amount (which would be fully taxable). A RRIF requires minimum annual withdrawals that increase with age, starting at about 5.28% at age 72.
CRA-Aligned: RRSP limits and tax savings based on 2025 CRA rates. Investment projections are illustrative only. Consult a financial advisor for personalized advice.
How the Registered Retirement Savings Plan helps you save for retirement
What is an RRSP?
A Registered Retirement Savings Plan (RRSP) is a tax-sheltered investment account designed for retirement savings. Contributions are tax-deductible — if you earn $80,000 and contribute $10,000, your taxable income drops to $70,000. Your investments grow tax-free inside the RRSP. You pay tax only when you withdraw the money, ideally in retirement when your income (and tax rate) is lower.
How much can you contribute?
Your RRSP contribution limit for 2025 is 18% of your previous year's earned income, up to a maximum of $32,490. Unused room carries forward indefinitely. You can check your exact limit on your CRA Notice of Assessment or through My CRA Account. Going over your limit by more than $2,000 results in a penalty of 1% per month on the excess.
When is the RRSP deadline?
You have until 60 days after the end of the tax year to make contributions that count for the previous year. For the 2025 tax year, the deadline is March 1, 2026 (or March 2 if it is a leap year). This gives you extra time to make a last-minute contribution and claim the deduction on your tax return.
What is a spousal RRSP?
A spousal RRSP lets the higher-income spouse contribute to an RRSP in the lower-income spouse's name. The contributor gets the tax deduction, but the funds belong to the recipient spouse. This can effectively split retirement income between spouses and reduce the overall tax bill. Withdrawals within three years of contribution are attributed back to the contributor.
Can you use your RRSP to buy a home?
Yes, through the Home Buyers' Plan (HBP). First-time homebuyers can withdraw up to $60,000 from their RRSP tax-free to buy or build a qualifying home. You must repay the withdrawal over 15 years, starting two years after the withdrawal. If you miss a repayment, that year's amount is included in your taxable income.
What happens to your RRSP at age 71?
By December 31 of the year you turn 71, you must convert your RRSP to one of three options: a Registered Retirement Income Fund (RRIF), an annuity, or a lump-sum withdrawal. Most people choose a RRIF, which provides ongoing income while keeping the remaining balance invested. You cannot contribute to your own RRSP after 71, but you can contribute to a spousal RRSP if your spouse is under 71.
Should you contribute to an RRSP or a TFSA?
Generally, if you expect your tax rate to be lower in retirement than it is now, an RRSP is better because you save tax at a high rate now and pay at a lower rate later. If your income is modest, a TFSA may be better because TFSA withdrawals do not affect income-tested benefits like GIS. Many advisors recommend using both accounts together for maximum flexibility.
CRA-Aligned: Based on 2025 CRA rates and thresholds. For personal advice, speak to a qualified accountant or tax professional.
Disclaimer: This calculator provides estimates based on current CRA rates and thresholds for the 2025 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant before making financial decisions. Read our terms
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