RRSP Contribution Limits & Withdrawal Rules

• Eligibility: To open and contribute to an 註冊退休儲蓄計劃（RRSP）, you must be a Canadian resident with a valid Social Insurance Number (社會保險號碼（SIN）) and have filed at least one Canadian tax return reporting earned income. You can't open or contribute to an 註冊退休儲蓄計劃（RRSP） after December 31 of the year you turn 71.
• Contribution limit: Each year, you earn new 註冊退休儲蓄計劃（RRSP） contribution room, which is 18% of your earned income from the previous year, up to an annual limit set by the CRA。
• Pension adjustments: Any registered pension plan (RPP) contributions you have are reported as a pension adjustment (PA) on your T4 or by the CRA. This reduces your 註冊退休儲蓄計劃（RRSP） contribution room for the following year.
• Unused contribution room: 註冊退休儲蓄計劃（RRSP） contribution room is cumulative. If you don't use all your room in a given year, the unused portion carries forward indefinitely. This means you can add it to your new limit and increase your contribution room in future years.
• Over-contributions: Provided you are over 18, you are allowed a $2,000 lifetime buffer for over-contributions without penalty. If you exceed the annual limit, the CRA will penalize you with a 1% tax per month on the excess until you withdraw it or earn new contribution room.
• 配偶 註冊退休儲蓄計劃（RRSP）s: A spousal 註冊退休儲蓄計劃（RRSP） is a special type of 註冊退休儲蓄計劃（RRSP） that allows one spouse (usually the higher earner) to contribute in their partner's name, using the contributor's annual limit. Contributions are deductible by the contributor but owned and withdrawn by the spouse.

• Deduction limit: Your 註冊退休儲蓄計劃（RRSP） deduction limit is the maximum amount you can deduct from your contributions for a year. 投資組合內持有的 CRA calculates it based on your unused deduction room at the end of the previous year, plus 18% of your prior year’s earned income (up to an annual limit), adjusted for pension adjustments and reversals.
• Tax reporting: You can deduct eligible 註冊退休儲蓄計劃（RRSP） contributions on your tax return up to your deduction limit, but you can also carry over unused deductions to future years. Investment income and capital gains are not taxed until you withdraw the money. Note that withdrawals are taxed at your marginal tax rate.
• Timing: You can claim 註冊退休儲蓄計劃（RRSP） contributions made during the calendar year (January 1st to December 31st), or within the first 60 days of the following year, as a deduction for the current tax year.
• Pension adjustments: If you contribute to a registered pension plan (RPP), those contributions will reduce your 註冊退休儲蓄計劃（RRSP） deduction limit. This is reflected in your pension adjustment (PA), which is reported on your T4 slip.

To note: You cannot claim a deduction for any interest or borrowing costs you paid on loans for a contribution. Administrative costs and capital losses are also not deductible.

• Timing: You can withdraw funds from your 註冊退休儲蓄計劃（RRSP） at any time, even before retirement.
• Taxes: Withdrawals from your 註冊退休儲蓄計劃（RRSP） are considered taxable income in the year you make them. Your financial institution will withhold tax at the time of the withdrawal. However, the actual tax you owe depends on your total annual income and marginal tax rate.
• Tax rates: The tax rate applied to your withdrawal depends on the amount withdrawn and your residency status. In Quebec, rates differ and there is an added provincial tax.
• Effect on contribution space: Any withdrawals you make are not added back to your contribution room, effectively lowering your limit permanently.
• 註冊退休收入基金 (RRIF賬戶): After your 註冊退休儲蓄計劃（RRSP） reaches maturity on December 31 of the year you turn 71, you must convert it to a registered retirement income fund (RRIF). This type of savings account continues to grow tax-deferred, but you must withdraw a minimum amount each year, providing you with a regular income stream throughout retirement.
• Home Buyers’ Plan: If you’ve coupled your 註冊退休儲蓄計劃（RRSP） with the federal government’s Home Buyers’ Plan (HBP), you can withdraw up to $60,000 from your 註冊退休儲蓄計劃（RRSP） to help finance the down payment on your first home. This amount is not taxable provided you repay it within a 15-year period.
• Lifelong Learning Plan: Through the federal Lifelong Learning Plan (LLP), you can withdraw up to $10,000 per year—$20,000 total—to finance full-time education for yourself or your spouse/common-law partner. Withdrawals aren’t taxed if you repay 10% yearly, starting in the second year after your last withdrawal.