Benefits of an RRSP 

Defer tax on your current income through tax-deductible RRSP contributions.
No tax on contributions, investment income and growth, such as interest, capital gains and dividends, until withdrawn from the RRSP. 
Borrow from your RRSP to help buy a first home or pay for education for yourself or your spouse or common-law partner.

Choose an RRSP that’s right for you

Individual RRSP 

  • You contribute to the plan and may be able to claim a tax deduction for your contributions.
  • You pay the taxes that apply on funds you withdraw from the plan.

Spousal or common-law partner RRSP

  • You contribute to the plan that is owned by your spouse or common-law partner and may be able to claim a tax deduction for your contributions.
  • Your spouse or common-law partner can withdraw funds from the plan and will generally pay any taxes that apply on withdrawals (although you may be liable for taxes in certain circumstances). 
  • May allow for income splitting.

Locked-in RRSPs or Locked-in retirement account (LIRA)

  • Funds transferred from your registered pension plan generally must be held in a Locked-in RRSPs or LIRA.
  • Funds usually cannot be accessed prior to the age of 55.

Choose the right combination of investments, which may include:

CIBC Mutual funds

These funds hold a portfolio of investments, such as stocks and bonds.

CIBC Fixed income

Choose from a wide range of fixed-income instruments, including guaranteed investment certificates (GIC) , which may have different features, risk ratings and terms.

Tax-free savings account (TFSA) versus RRSP

 

Purpose

Saving for any short- or long-term goal

Saving for retirement.

May also be used for first home purchase, life-long learning.

Age minimum

18 years or older1

No minimum age

Age maximum

No maximum age restriction

Must be included in income or converted to a registered retirement income fund (RRIF) or annuity by the end of year in which you turn 71

Contributions

Not tax-deductible

Tax-deductible

Unused contribution room

Carried forward

Carried forward

Interest, income and growth in the plan

Not taxed when plan rules are followed

Not taxed when plan rules are followed

Contribution limits

$6,000 in 2021, plus any unused contribution room from previous years 

18% of previous year's earned income, up to a maximum of $27,230 in 2020, plus unused contribution room from previous years and past service pension adjustment, less any pension adjustment

Withdrawals

Contributions and income earned can be withdrawn tax-free, if plan rules are followed. Amounts withdrawn are generally added back to your annual contribution room in the next calendar year.

Contributions, income and growth are taxable when withdrawn from the plan, if plan rules are followed. Withdrawals do not affect your annual contribution room.

Government benefits

Withdrawals do not affect eligibility for federal income-tested benefits such as Old Age Security (OAS)

Withdrawals are added to your income and may impact government benefits or credits, including income-tested benefits

Spousal or common-law partner plan

Not available 

Available. You can contribute to a spousal or common-law partner RRSP.

Both a TFSA and an RRSP offer significant tax benefits that can help you maximize your savings. Each account offers different tax advantages and it may be beneficial to contribute to both a TFSA and an RRSP. For information on choosing between RRSP and TFSA investing if you have limited funds, please see our report Just do it: The case for tax-free investing (PDF, 205 KB) Opens in a new window.

Canadian resident individuals begin accumulating TFSA contribution room in the year they turn 18. In provinces where the age of majority is 18, Canadian resident individuals who are 18 can open TFSAs. In provinces and the territories where the age of majority is 19, depending on the financial institution, you must be 19 to open a TFSA. 

Ready to open an RRSP account or make a contribution?