How much can I contribute to an RRSP?

Your deduction limit is generally a percentage of your previous year's earned income, up to a yearly dollar limit, plus unused room from earlier years. Your exact figure is on your CRA account, and the current percentage and dollar limit are on the CRA's pages.

Are RRSP withdrawals taxed?

Generally yes. RRSP payments are taxed as income in the year you receive them, because the contributions were deducted when they went in. The Home Buyers' Plan is an exception that lets you withdraw for a qualifying home and repay over time.

What happens to an RRSP at 71?

In the year you turn 71 you have to choose: withdraw the full amount as cash, move it into a RRIF, or use it to buy an annuity.

RRSP explained

How an RRSP works in Canada: the tax deduction, tax on withdrawals, the deadline, spousal RRSPs, the Home Buyers' Plan and what happens at 71.

Part of the Investment Accounts and Tax track on Agenticks. About 11 minutes, written for a beginner reader.

Read first: Tax-advantaged accounts explained.

Last reviewed 2026-11-08.

Risk notice. Tax rules depend on where you live and on your own circumstances, and they change. This lesson explains how the rules work in general; the official source linked below is the final word.

Key takeaways

An RRSP is a Canadian retirement account where deductible contributions reduce your tax now and withdrawals are generally taxed as income later.
New room each year is a share of the previous year's earned income, up to a dollar cap, and unused room carries forward.
Contributions made in roughly the first 60 days of a year can count for the year before. The exact deadline is published by the CRA each year.
A spousal RRSP, the Home Buyers' Plan and the move to a RRIF or annuity by the end of the year you turn 71 are all part of how the account works.

This lesson applies to Canada. The Registered Retirement Savings Plan, or RRSP, is registered with the Canada Revenue Agency, and the rules below are the CRA's. How they apply depends on your income, your family and your other plans, and the figures change every year. The RRSP is the Canadian version of the tax-deferred design from tax-advantaged accounts explained. Deductible contributions can be used to reduce your tax now, and you generally have to pay tax when you receive payments from the plan later. In between, investments inside grow without being taxed each year. That makes the RRSP a trade: a tax saving today, paid for with tax on every dollar that comes out tomorrow. Whether that trade works in your favour depends mostly on two tax rates, the one you face now and the one you will face when you withdraw.

The deduction is worth your marginal rate

A deduction lowers your taxable income, so it saves tax at roughly your marginal tax rate: the rate on your last dollars of income. The same contribution saves more tax for someone in a higher bracket than for someone in a lower one.

How much room you get. Your RRSP deduction limit is generally based on a percentage of your earned income in the previous year, capped at that year's RRSP dollar limit. Room you do not use carries forward. Membership of a workplace pension plan can reduce your room. Both the percentage and the dollar limits, including the next year's limit where the CRA has already published it, are in the table below. The deadline. Contributions made in roughly the first 60 days of a year can be deducted for the previous tax year, so the RRSP deadline falls around the start of March. The exact date is set each year and listed on the CRA's important dates page. You do not have to claim a deduction in the year you contribute. You can carry it forward and claim it in a later year, which some people do if they expect a higher income later.

Registered Retirement Savings Plan (RRSP)

RRSP dollar limit (2026)	$33,810, source: Canada Revenue Agency: MP, DB, RRSP, DPSP, ALDA, TFSA limits, YMPE and the YAMPE, checked 2026-11-08
RRSP dollar limit (2027)	$35,390, source: Canada Revenue Agency: MP, DB, RRSP, DPSP, ALDA, TFSA limits, YMPE and the YAMPE, checked 2026-11-08
Earned income rule (Current rule)	18% of the previous year's earned income, source: Canada Revenue Agency: How contributions affect your RRSP deduction limit, checked 2026-11-08
Deadline to contribute for the 2025 tax year (2025)	March 2, 2026, source: Canada Revenue Agency: Important dates for RRSPs, HBP, LLP, FHSAs and more, checked 2026-11-08
Home Buyers' Plan withdrawal limit (Current rule)	$60,000, source: Canada Revenue Agency: What is the Home Buyers' Plan, checked 2026-11-08
Home Buyers' Plan repayments begin (First withdrawals from 2026 to 2028)	The fifth year after the first withdrawal, source: Canada Revenue Agency: What is the Home Buyers' Plan, checked 2026-11-08
When an RRSP must end (Current rule)	By the end of the year you turn 71, source: Canada Revenue Agency: Options for your own RRSPs, checked 2026-11-08

Worked example: a contribution in, a withdrawal out

Someone contributes $5,000 while their marginal tax rate is 30%, and withdraws it 20 years later when their rate is 20%. Every figure is illustrative: a steady 5% a year and simplified tax.

Contribution	$5,000
Tax saved by the deduction (5,000 x 30%)	$1,500
Value after 20 years at 5% a year (5,000 x 1.05^20)	$13,266
Tax on withdrawal at 20% (13,266 x 20%)	$2,653
Kept from the RRSP	$10,613
If the $1,500 saving was also invested at 5% (1,500 x 1.05^20)	+$3,980
Total after tax, if the saving was invested too	About $14,593

Illustrative numbers, not a forecast. With the same rate going in and coming out, the result would match a TFSA. The lower rate on withdrawal is what made the difference here.

Notice the last row. The RRSP's full advantage only shows up if the tax saving is put to work as well. If the refund is spent, the comparison changes. TFSA vs RRSP compared goes through this step by step.

Spousal RRSPs. You can contribute to an RRSP owned by your spouse or common-law partner. You claim the deduction, and the contribution reduces your deduction limit, not theirs. The money belongs to your partner, and when it is withdrawn it is normally taxed as their income. The idea is to place future retirement income with the partner expected to have the lower tax rate. There is a timing rule to stop this being used for a quick tax shift. If you contributed to a spousal RRSP in the year your partner withdraws, or in either of the two years before, you may have to include all or part of the withdrawal in your income instead.

The Home Buyers' Plan. The HBP lets you withdraw from your RRSPs to buy or build a qualifying home without the withdrawal being taxed at the time. The current withdrawal limit is in the table above. It is not free money: it has to be repaid to your RRSPs over 15 years, and any required repayment you miss is added to your income for that year. Under temporary relief, if your first HBP withdrawal is made between 2026 and 2028, repayments start in the fifth year after the withdrawal rather than the second. The HBP is separate from the FHSA, a newer account built only for first homes. FHSA explained covers how that one works.

When the RRSP has to end. In the year you turn 71, you have to choose what happens to your RRSPs: withdraw the full amount in cash, move the funds into a registered retirement income fund (RRIF), or use them to buy an annuity. Taking it all as cash means the whole amount is taxed as income that year. A RRIF keeps the money invested but pays out a minimum each year, taxed as income as it arrives. An annuity turns the savings into regular payments. The deadline to contribute to your own RRSP is also the end of the year you turn 71.

Deduction limit: How much you can deduct, built from earned income and carried forward
Spousal RRSP: Your contribution, your deduction, your partner's account
Home Buyers' Plan: Withdraw for a qualifying home and repay over 15 years
RRIF: Where RRSP savings can move to keep paying a yearly income

Every dollar out is income

Because RRSP and RRIF withdrawals are taxable income, a large withdrawal in one year can push part of it into a higher tax bracket, and it counts as income for benefits and credits that depend on income. Spreading withdrawals is one of the main levers people consider.

To see the RRSP side by side with the TFSA, read TFSA vs RRSP compared. For the account most often paired with it, read TFSA explained. If you are only starting out, how to start investing comes first.

You understand how the RRSP works

You can now explain the RRSP deduction, why withdrawals are taxed, how spousal RRSPs and the Home Buyers' Plan work, and what happens at 71.

Check your understanding

What happens to the tax when money comes out of an RRSP?: It is generally taxed as income in the year you receive it. The deduction on the way in is paid back through tax on the way out. That is what tax-deferred means.
How is the new RRSP room you get each year worked out?: A percentage of the previous year's earned income, up to that year's dollar limit. Both the percentage and the dollar limit are in the table in this lesson. Unused room carries forward.
You contribute to your spouse's spousal RRSP. Who claims the deduction?: You, the contributor, using your own RRSP deduction limit. Contributions to a spousal or common-law partner RRSP reduce the contributor's deduction limit, and the contributor deducts them.
What must happen to your own RRSP in the year you turn 71?: You choose to withdraw it, move it into a RRIF, or use it to buy an annuity. Those are the three options the CRA lists.

Common questions

How much can I contribute to an RRSP?: Your deduction limit is generally a percentage of your previous year's earned income, up to a yearly dollar limit, plus unused room from earlier years. Your exact figure is on your CRA account, and the current percentage and dollar limit are on the CRA's pages.
Are RRSP withdrawals taxed?: Generally yes. RRSP payments are taxed as income in the year you receive them, because the contributions were deducted when they went in. The Home Buyers' Plan is an exception that lets you withdraw for a qualifying home and repay over time.
What happens to an RRSP at 71?: In the year you turn 71 you have to choose: withdraw the full amount as cash, move it into a RRIF, or use it to buy an annuity.

Terms defined in this lesson

Continue

Sources

Written and reviewed by the Agenticks Learn editorial team. How we write and check lessons.

Agenticks Learn is general education. It is not financial, investment, tax or legal advice, it does not take your situation into account, and nothing on it is a recommendation to buy, sell or hold any security or to open any account. Examples use illustrative numbers. Investing involves risk, including losing money you put in, and past performance does not predict future results. Tax rules and limits change; the official sources linked in each lesson are the final word.