Key points
- Your deduction limit is 18% of the previous year's earned income, up to $33,810 for 2026 ($35,390 for 2027), less any pension adjustment, plus unused room.
- Contributions for the 2026 tax year can be made until 1 March 2027 (60 days after the year ends).
- Withdrawals are taxable income; the bank or insurer withholds tax (10%, 20% or 30% by amount, outside Quebec), which may not cover what you owe.
- Insurers offer RRSPs too, for example as segregated fund contracts or annuities; a licensed agent explains those products.
- At death an RRSP is generally taxed on the final return unless it passes to a spouse, partner or qualifying dependant.
How an RRSP works
You open an RRSP with a financial institution and choose what it holds. Contributions reduce your taxable income for the year you deduct them, so the plan is most useful when your tax rate now is higher than it will be when you withdraw. Inside the plan, interest, dividends and gains aren't taxed until money comes out.
- Room: your notice of assessment shows your deduction limit. Over-contributing by more than $2,000 costs 1% a month on the excess.
- Home Buyers' Plan: first-time buyers can withdraw up to $60,000 tax-free to buy a home and repay it over time.
- At 71: the plan must be converted, usually to a RRIF or an annuity, by the end of the year you turn 71.
To see what a contribution could change on your return, try the RRSP tax savings calculator; for the choice between the two accounts, read RRSP or TFSA.
RRSPs held with insurance companies
Life insurance companies also offer RRSPs. Two products come up often, described here only in general terms:
- Segregated fund contracts, which hold investments much like mutual funds, inside an insurance contract. They often include protection of part of the deposits at maturity or death and let you name a beneficiary on the contract. Fees are usually higher than for comparable funds.
- Annuities, which turn savings into a stream of payments, for a set period or for life. They are usually discussed at retirement, when an RRSP is converted.
Whether either suits you is a product question for a licensed agent or registered adviser. The tax rules for the RRSP itself are the same wherever it is held.
RRSPs at death
When an RRSP holder dies, the value of the plan is generally included in income on their final return, which can produce a large tax bill. It can instead pass to a surviving spouse or common-law partner, or in some cases a financially dependent child or grandchild, with the tax deferred. Naming the right beneficiary, and making sure it matches your will, matters; see estate planning.
Where Finvo fits
We prepare the return that claims your RRSP deduction, tell you whether contributing this year or carrying the deduction forward makes more sense, and look at RRSPs, TFSAs and insurance together in our tax-side financial planning. We don't sell investments.
Finvo itself does not sell insurance or give insurance advice. Finvo can connect you with a licensed insurance agent from our partner network who can help with insurance advice if you need it. The licensed agent advises on products and coverage; Finvo covers the tax side. Insurance and other specialists are joining Finvo as contractors, so a group of consultants can work on your file together and you don't have to go from place to place.
Whoever you deal with, you can check that an agent is licensed: in British Columbia with the Insurance Council of BC licensee directory, and in Alberta with the Alberta Insurance Council agent lookup.
This page is general information, checked against the sources below on 5 Nov 2026. Every policy and plan has its own terms; it isn't insurance, tax, investment or legal advice for your situation.