Registered Plans

RRSP

A tax-advantaged way to save for retirement.

What is an RRSP?

A Registered Retirement Savings Plan (RRSP) allows you to create a custom portfolio of investments to save for your retirement. Contributions are tax-deductible and grow tax free until they’re withdrawn from the plan.

Why invest with Alterna?

 

How to make the most of your RRSP

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  • Start Early - The sooner you contribute the better. Starting early means your savings have more time to grow tax free.

  • Contribute the max - Set up an automatic transfer, making it easier to save.

  • Don't miss out - You can still contribute for any past year you may have missed. Unused RRSP contribution room carries forward.

  • Benefit from our great rates - Take advantage of our great rates and wide variety of investing options.

Registered Retirement Income Funds (RRIFs)

Just because you’ve stopped working doesn’t mean your investments have to. After you convert to an income option by age 71, you can continue to hold a customized portfolio of investments that grows tax free by transferring the funds into a RRIF.

Ways to Invest

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Advisors

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Bank anywhere with our online banking options. Buy or renew GICs/Term Deposits online or set up transfers.

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Calculators

Articles

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Raising a Retirement Fund

It's never too early or too late to start saving for retirement. Learn more about how you can ensure the financial future you want.

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Benefits of an RRSP


A Registered Retirement Savings Plan is an investment account designed to help you prepare for retirement by maximizing your savings.

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A Pocket Guide to TFSAs and RRSPs

You’ve heard of both a Tax-Free Savings Account and Registered Retirement Savings Plan. Here are the key differences between these two accounts.

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RRSP & RRIF

Frequently Asked Questions

RRSP

Frequently Asked Questions

An RRSP can hold a variety of investments, including:

  • Savings accounts
  • Term Deposits & MarketTracer® Term Deposits
  • Mutual Funds
  • ETFs
  • Stocks
  • Bonds

The RRSP contribution limit for 2022 is 18% of the earned income you reported in the previous year, up to a maximum of $29,210. You can also contribute any amount carried forward as unused contribution room from previous years.

Here’s an illustration: The maximum RRSP deduction limit for 2022 is $29,210 However, if you did not use all your RRSP contribution room in previous years, you can carry forward the unused amount. Therefore, your RRSP deduction limit for 2022 will be $29,210 plus whatever unused amount you have that’s carried forward.

The maximum RRSP contribution limits in recent years:

Year

Contribution Limit

2015

$24,930

2016

$25,370

2017

$26,010

2018

$26,230

2019

$26,500

2020

$27,230

2021

$27,830

2022

$29,210

The maximum limit for future years will be indexed for inflation. To find out your exact RRSP deduction limit, check your previous year’s income tax Notice of Assessment or call CRA Tax Information Phone Service at
1-800-267-6999.

You can carry forward the unused portion of your annual RRSP contribution limit indefinitely. If you don't have the cash to make your maximum annual contribution, or if your RRSP contribution limit is growing larger with each passing year, you may want to consider an investment loan. This way, you can try to maximize your contribution and get the most out of your tax refund. An advisor can help you determine if this strategy will work well for your personal situation.

You are allowed to contribute up to $2,000 over your contribution limit without penalty. If you exceed this limit, you will incur a penalty of 1% per month from the time of your over-contribution.

The sooner you start contributing to an RRSP, the more money you will accumulate for retirement. For example, if you start contributing $2,000 a year at age 25, and earn 4% interest, you will have $147,304 by the time you turn 60. If you contribute the same $2,000 a year starting at age 35, and earn the same 3.5%, you will have $83,292 by the time you turn 60.

This example is an illustration only. Please speak to one of our advisors to review options for your specific financial needs.

If you find it challenging to come up with a lump sum to invest at the beginning of the year, we can help you set up regular monthly contributions to match your budget. Contributions can be little as $25 a month.

A spousal RRSP is an RRSP you set up in the name of your spouse. It enables you to help your spouse save for retirement while deducting the contributions from your taxable income.

It can be an effective way to income split if your spouse will be receiving a smaller retirement income than you. As the money that is growing in your spouse's RRSP will eventually be paid out as retirement income to your spouse, it will be taxed at a lower rate due to their lower income level.

Any contributions you make to a spousal RRSP reduces your annual RRSP deduction limit. Your contributions do not affect your spouse's annual RRSP deduction limit.

In most situations it's best to place the extra funds into an RRSP and use your tax refund to pay down your mortgage.

Yes! We provide several flexible options to borrow funds to make an RRSP contribution.

You have to pay tax on any money you withdraw from your RRSP. The exception is if you use the funds to buy your first home in accordance with the terms of the federal government’s Home Buyers Plan or go back to school in accordance with its Lifelong Learning Plan. But you’ll still need to put that money back in your RRSP eventually.

RRIF

Frequently Asked Questions

By the end of the year in which you turn 71, you must withdraw the money from your RRSP. To avoid facing a heavy tax burden by withdrawing it all at once, one option is to convert it into a Registered Retirement Income Fund (RRIF).

A RRIF is a tax-sheltered account that pays you a steady stream of income in retirement. It’s like an RRSP, but instead of putting money into it, you take money out of it.

Withdrawing from RRSP can result in a heavy tax burden, by transferring your RRSP funds into a RRIF, you avoid being hit with a large tax bill at age 71. With a RRIF, you only pay tax on the income you withdraw from it each year (you are required to withdraw a minimum annual amount). You can also continue to grow your money tax free by investing it in a range of options such as term deposits, mutual funds, stocks and bonds.

There is no minimum age requirement for converting an RRSP to a RRIF. You can do so as soon as you need retirement income. But you have to convert your RRSP into some form of retirement income product before the end of the calendar year in which you turn 71. You can make a final contribution to your RRSP in the year you turn 71, as long as you do so by December 31.

While there are no tax consequences for transferring funds from an RRSP to a RRIF, the payments you receive from a RRIF are subject to income tax. Since your RRIF income is spread over your retirement years, however, so are the taxes. If you are over age 65, income received from your RRIF and other pensions also qualifies for the Pension Income Credit, which can lead to tax savings.

Yes, you can choose to base your RRIF payments on your birthdate or your spouse's/common-law partner's birthdate. As the minimum you are required to withdraw each year increases with age, if your spouse is younger than you, and you base it on your spouse’s birthdate, your minimum required payments will be lower. If you didn't make this choice when you applied for your RRIF, or if you marry or enter into a common-law partnership later, you can transfer your RRIF to a new RRIF based on your spouse's age.

The minimum required annual withdrawal from a RRIF is set by the Canada Revenue Agency (CRA) and increases each year based on your age. To check this year’s required minimums, see the CRA’s information on Receiving income from a RRIF.

Legal

*Mutual funds and other securities are offered through Credential Securities, a division of Credential Qtrade Securities Inc. Credential Securities is a registered mark owned by Aviso Wealth Inc. Mutual funds are offered through Qtrade Asset Management (a tradename of Credential Asset Management Inc).

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