| Age | Contributed | Growth | Balance |
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How the RRSP works
A Registered Retirement Savings Plan lets you defer income tax on contributions until you withdraw in retirement — usually when you're in a lower tax bracket. Every dollar you contribute lowers your taxable income for the year, so a $10,000 contribution at a 35% marginal rate saves you roughly $3,500 in tax immediately.
Contribution room is 18% of your prior-year earned income, capped at $31,560 for 2025. Unused room carries forward indefinitely — you can check your exact limit on your CRA Notice of Assessment or in CRA My Account.
Inside the RRSP, investments compound tax-free. This is powerful: a 30-year horizon at 6% turns $8,000/year into roughly $670,000, of which about $430,000 is growth. On withdrawal, everything is taxed as regular income — which is why the RRSP is most valuable when your retirement tax rate is lower than your working-age rate.
Pair this with the TFSA (tax-free on withdrawal) and the FHSA (for first-time home buyers) to build a full tax-efficient plan.
How much can I contribute to my RRSP in 2025?
Your 2025 RRSP limit is 18% of your 2024 earned income, up to $31,560, minus any pension adjustment. Unused room from prior years carries forward. Check your exact room on your latest CRA Notice of Assessment or CRA My Account.
How is my tax refund calculated?
Your refund is approximately your contribution × your marginal tax rate. If you contribute $10,000 and your marginal rate is 30%, you'll receive roughly $3,000 back when you file. This calculator uses your entered marginal rate; actual refund depends on your full return.
RRSP vs TFSA — which is better?
RRSP wins when your retirement tax rate is lower than your working rate (common for high earners). TFSA wins when rates are equal or reversed, or when flexibility matters. Most Canadians benefit from using both.
When must I convert my RRSP?
By December 31 of the year you turn 71. You can convert to a RRIF (Registered Retirement Income Fund), buy an annuity, or withdraw the balance (taxed as income). Most people choose a RRIF to keep growth tax-deferred while drawing income.