Registered Retirement Savings Plan (RRSP)



A registered retirement savings plan (RRSP) is in essence a personal savings plan with tax-saving characteristics which allow you to save for after retirement. Essentially, it is a personal pension plan.


Types of RRSP: RRSP is primarily divided into three segments; Individual, Spousal and Group.

  1. Individual RRSP:

    This type of RRSP is an individualistic type where only one person is the account holder. Subsequently, the account holder is also usually the only contributor.

  2. Spousal RRSP:

    This type of RRSP is for individuals with a spouse. The spouse that is the higher earner amongst the two is consequently called the spousal contributor and is also the account holder. Income after retirement from an RRSP account is however equally split between the spouses.

  3. Group RRSP:

    This type of RRSP is mainly for employers who coordinate for employees to contribute through a regular arrangedpayroll subtraction. The contributions are then deposited into employees’ account

Benefit of RRSP:

RRSP itself is a very wise investment with a bundle of benefits.

  • No tax on investment until withdrawal
  • In case of death of a spouse, the transfer is tax-free
  • Lower tax than general in case of withdrawal
  • No limit on number of plans
  • Tax-free transfers to other RRSPs
  • Allows one to retire earlier than someone without an RRSP plan
  • Can be used for other means such as buying a new home, education purposes etc.