Options for your own RRSPs (2024)

FAQs

What options are allowed in RRSP? ›

You may want to set up a self-directed RRSP if you prefer to build and manage your own investment portfolio by buying and selling a variety of different types of investments. For more information on eligible investments, see Self-directed RRSPs.

Contribute early

Procrastination can be costly, so make your RRSP contribution early in the year. The sooner you put your money into an RRSP, the sooner it starts working for you on a tax-deferred basis. If you can't do it all in January, a monthly contribution program is simple and powerful.

Individual RRSP: The most common type of RRSP is a plan registered in your name. The investments held in the plan and all the tax benefits belong to you.

Registered accounts like TFSAs, FHSAs, and RRSPs are able to trade up to level 2 options strategies. Option strategies are a combination of buying and selling different types of options (calls/puts), sometimes combined with stock/ETF ownership (or shorting) to form a trading strategy.

What can you hold in your RRSP? Like other registered savings plans, RRSPs can hold savings deposits and investments. Qualified investments – allowed to be held in an RRSP – include cash, gold, GICs, bonds, mutual funds, ETFs, and more. Investments that cannot be held in an RRSP include precious metals, commodity.

Registered Retirement Savings Plans (RRSPs)

February 29, 2024 is the deadline for contributing to an RRSP for the 2023 tax year. December 31 of the year you turn 71 years of age is the last day you can contribute to your own RRSP. For more information, go to RRSP options when you turn 71.

If your RRSPs are not locked in, you can withdraw funds at any time.

Low income

A TFSA can be an ideal savings vehicle if you're in a low-income tax bracket. RRSPs may not be well suited to low-income Canadians. The RRSP tax savings are insignificant and you may be in a higher tax bracket when you make withdrawals, as the earlier example demonstrates.

The 4% rule says people should withdraw 4% of their retirement funds in the first year after retiring and take that dollar amount, adjusted for inflation, every year after. The rule seeks to establish a steady and safe income stream that will meet a retiree's current and future financial needs.

How much RRSP should I have at 40? ›

At age 40, 2.1 times your annual income. At age 50, 4.6 times your annual income. At age 60, 8.5 times your annual income.

There is less freedom in how you can withdraw from an RRSP, compared to a TFSA. Withdrawals are classed as taxable income (unlike TFSA withdrawals). Low-income earners pay a low rate of income tax, so RRSPs don't make financial sense for this kind of investor (a TFSA would probably be a better option).

401(k)s and Registered Retirement Savings Plans (RRSPs). have key similarities and differences, but both help citizens save money and allow it to grow tax-free. RRSPs are more portable than 401(k)s because they can be opened by a private citizen; 401(k)s are only available via employers.

With a TFSA, you can withdraw money any time, tax-free! Withdrawn Amounts - When withdrawing funds from an RRSP, your contribution room is lost for amounts you withdraw subject to certain exceptions. For a TFSA, withdrawn amounts are added back to your contribution room in the following year.

Only putting cash in your RRSP

Did you know you can hold many types of investments in an RRSP? This includes stocks, guaranteed investment certificates, mutual funds, bonds and more. Here's a common scenario. In a scramble to make the deadline, you contribute cash to your RRSP.

Your RRSP contribution limit for 2024 is 18% of earned income you reported on your tax return in the previous year, up to a maximum of $31,560. For 2023, the dollar limit was $30,780. For 2025, the dollar limit will be $32,490.