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How can an RRSP help me save?

A Registered Retirement Savings Plan (RRSP) is not a product, like a Canada Savings Bond or a mutual fund. It’s a type of account you use to save for retirement. You can hold mutual funds, Canada Savings Bonds, and many other types of investments inside an RRSP.
When you put money in an RRSP, you can get a tax break in three ways:
  1. You don’t pay tax on the money you contribute as long as it stays in the plan. This reduces your taxable income – which in turn reduces the amount of tax you pay. That puts extra money in your pocket today.
  2. You also don’t pay tax on the money you make investing your savings, as long as the money stays in the plan.
  3. If you wait until you retire to take the money out of your RRSP, and your total income is lower, you’ll pay tax at a lower rate on the same dollars.
To see the difference the tax savings can make, read Taking shelter: Gwen and Karima’s story.

Tip: You can put up to 18% of your income into your RRSP each year (up to a maximum dollar amount). If you contribute less, or miss a year, so you can “catch-up” later. Look at last year's Notice of Assessment to see how much you can contribute to your RRSP. Learn more now about contributing to your RRSP.