A registered retirement savings plan (RRSP) is a retirement plan that we register and that you or your spouse or common-law partner establish and contribute to. Deductible RRSP contributions can be used to reduce your tax. Any income you earn in the RRSP is usually exempt from tax for the time the funds remain in the plan. However, you generally have to pay tax when you cash in or receive payments from the plan.

You can withdraw from RRSPs to buy or build a home for yourself or for someone who is related to you and is disabled. See Home Buyers' Plan for details.

You can withdraw from RRSPs to finance training or education for you or your spouse or common-law partner. See Lifelong Learning Plan for details.

Important dates

March 1, 2005 – Deadline for contributing to your RRSP for the 2004 tax year.

Frequently asked questions

How long can I keep my RRSP limit? If I can't afford to put money in now, does the limit keep growing?

How much can I contribute this year? What's my RRSP deduction limit?

Can I deduct interest and fees for my RRSP?

I have lost money in my RRSPs that are mutual funds. Can I claim these losses on my return?

I have a lot of small RRSP plans I bought at different banks. I want to combine them into one plan at one bank. How do I do this?

How long can I keep my RRSP limit? If I can't afford to put money in now, does it keep growing?

If you are unable to use any part of the RRSP deduction limit, the amount is carried forward to the next year and added to the deduction limit for that year. Any part of your RRSP deduction limit that you do not use can be carried forward indefinitely.

How much can I contribute this year? What's my RRSP deduction limit?

Your RRSP deduction limit is shown on your Notice of Assessment or Notice of Reassessment for the previous tax year. You can also see it online using My Account, you can call our automated Tax Information Phone Service (T.I.P.S.) at 1-800-267-6999, or you can call us at 1-800-959-8281.

Can I deduct interest and fees paid for my RRSP?

You cannot deduct any interest paid on money you borrowed to contribute to an RRSP.

You cannot deduct fees charged directly to you by the plan administrator of an RRSP or fees deducted directly from an RRSP.

Note
You may be able to deduct carrying charges and interest you paid to earn income from investments other than RRSPs. This includes fees to manage or take care of your investments other than administration fees paid for RRSPs.

I have lost money in my RRSPs that are mutual funds. Can I claim these losses on my return?

No, you cannot deduct mutual fund losses within RRSPs.

I have a lot of small RRSP plans I bought at different banks. I want to combine them into one plan at one bank. How do I do this?

Contact the financial institution you want to transfer the RRSP funds to. They will need to know which other financial institutions to contact, so you should show them your contribution receipts and RRSP statements, or simply tell them in person the information they need. They will contact the other financial institutions to do a direct transfer of the funds. You may want to contact the other financial institutions so they are aware of your intentions.

This glossary gives you a general description of RRSP terms.

Annuitant – Generally, an annuitant is the person for whom a retirement plan provides retirement income. In certain circumstances, the surviving spouse or common-law partner may qualify as the annuitant when, because of the death of the annuitant, he or she becomes entitled to receive benefits out of the retirement plan.

Common-law partner – This applies to a person of the opposite or same sex who is not your spouse, with whom you live and have a relationship and to whom at least one of the following applies. He or she:

a) is the natural or adoptive parent (legal or in fact) of your child;

b) has been living and having a relationship with you for at least 12 continuous months; or

c) lived with you previously for at least 12 continuous months as your spouse or common-law partner.

Note
Under proposed changes, condition c) will no longer exist. The effect of this proposed change is that a person (other than one described in situation a) above) will be your common-law partner only after your current relationship with that person has lasted at least 12 continuous months. This proposed change will apply to 2001 and later years.

References to 12 continuous months in this definition include any period that you were separated for less than 90 days because of a breakdown in the relationship.

Commutation payment – This is a fixed or single lump-sum payment from your RRSP annuity that is equal to the current value of all or part of your future annuity payments from the plan.

Deferred profit sharing plan (DPSP) – This is an employer-sponsored plan we register where the employer shares the profits of a business with all the employees or a designated group of employees.

Defined benefit provisions – These are terms of a registered pension plan that usually promise a specified level of pension when you retire for each year of your pensionable service.

Exempt period – The period from the date of death to December 31 of the year after the year of death.

Financially dependent – You are generally considered a financially dependent child or grandchild of a deceased annuitant at the time of death if, before that person's death, you ordinarily resided with and depended on the annuitant, and you meet one of the following conditions:

• your net income (line 236 of your return) for the year before the year in wich the annuitant died was equal to or less than the basic personal amount (line 300 from Schedule 1) for that previous year; or

• for deaths in 2003, you are infirm and your net income ( line 236) for 2002 was equal to or less than $13, 814, and for deaths in 2004, you are infirm and your net income (line 236) for 2003 was equal to or less than $14,035.

If, before the annuitant's death, you lived away from home because you were attending school, we still consider you to have resided with the annuitant.

If your income was more than the amounts described above, we will not consider you to be financially dependent on the annuitant at the time of death, unless you can establish otherwise.

In such a case, you or the legal representative should submit a request in writing to your tax services office outlining the reasons why we should consider you to be financially dependent on the annuitant at the time of death.

Foreign plan – A plan or arrangement maintained primarily to benefit non-residents for services they perform outside Canada.

Gift – Any amount that someone other than you or your spouse or common-law partner contributed to your RRSP.

Government-sponsored retirement arrangement – This is an unregistered retirement plan established for people who are not employees of a government or other public body, but who are paid from public funds for their services

Locked-in RRSPs - In most cases, you will not be able to withdraw funds from a locked-in RRSP. We do not regulate or establish whether or not funds are locked in. Locked-in refers to the restrictions and limitations that are imposed by the Pension Benefit Act for each province and territory. The locked-in RRSP is designed to preserve pension assets for your retirement. Money put into your locked-in RRSP usually is the transfer value of pension benefits you have built up in your former employer's pension plan, which you asked to be moved when you terminate employment or plan membership. If you are unsure if your RRSPs are locked in, contact your issuer.

Matured RRSP – A matured RRSP is one that generally, is paying you retirement income.

Money purchase provisions – These are terms of an RPP under which the amount of your pension depends on how much you and your employer contribute to the RPP for you.

Pension adjustment (PA) – Your PA for a year is the total pension credits accrued for the year under RPP defined benefit or money purchase provisions and DPSPs your employer sponsors. A pension credit is a measure of the value of the benefit you earn for the year under a DPSP, or under a defined benefit or money purchase provision of an RPP. If you participate in a government-sponsored retirement arrangement or a specified retirement arrangement, your pension credit amount may also measure the value of the benefit you earn for the year under these arrangements. If you want to know how your PA is calculated or why you have a PA, contact your employer or plan administrator.

Qualified beneficiary – A qualified beneficiary includes the deceased annuitant's spouse or common-law partner.

It also includes a financially dependent child or grandchild of the deceased annuitant, if the death occurred:

• in 1999 or later;
• in 1998, and the annuitant had no spouse or common-law partner at the time of death;
• in 1998, the annuitant had a spouse or common-law partner at the time of death, and an election was filed to treat the child or grandchild as a qualified beneficiary (for more information on this election, contact us);
• in 1996 or 1997, the annuitant had a spouse at the time of death, and an election was filed to treat the child or grandchild as a qualified beneficiary (for more information on this election, contact us); and
• from 1993 to 1997, and the annuitant had no spouse at the time of death.

Qualifying home - For the purposes of the Home Buyers' Plan, a qualifying home is a housing unit located in Canada. This includes existing homes and those being constructed. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings, all qualify. A share in a co-operative housing corporation that entitles you to possess, and gives you an equity interest in, a housing unit located in Canada also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify

Refund of premiums – This is an amount that is paid or considered to have been paid from a deceased annuitant's RRSP to a qualified beneficiary.

Registered pension plan (RPP) – This is a pension plan that we have registered. It is a plan where funds are set aside by an employer, or by an employer and employees, to provide a pension to employees when they retire.

Registered retirement income fund (RRIF) – This is a fund you establish with a carrier and that we register. You transfer property to the carrier from an RRSP, RPP, or from another RRIF, and the carrier makes payments to you.

Registered retirement savings plan (RRSP) – This is a retirement plan that we register and that you or your spouse or common-law partner establish and contribute to. Deductible RRSP contributions can be used to reduce your tax. Any income you earn in the RRSP is usually exempt from tax for the time the funds remain in the plan. However, you generally have to pay tax when you cash in or receive payments from the plan.

RRSP contribution – This is the amount you pay, in cash or in kind, at the time you contribute to an RRSP.

RRSP deduction – Refers to the amount you indicate on line 208 when you file your return.

RRSP deduction limit – This refers to the maximum amount you can deduct from contributions you made to your RRSPs or to a spousal or common-law partner RRSP for a year. The calculation is based, in part, on your previous year earned income (excluding transfers to your RRSPs of certain types of qualifying income). Pension adjustments (PAs), past service pension adjustments (PSPAs), pension adjustment reversals (PARs), and your unused RRSP deduction room, are also used to calculate the limit.

RRSP overcontributions – Generally, this is the amount of RRSP contributions that is more than your RRSP deduction limit for the year plus $2,000. Overcontributions may be subject to a tax of 1% per month.

RRSP unused contributions – This is the amount of RRSP contributions that you could not deduct or have chosen not to deduct. You can carry forward this amount and use it as a deduction in a future year up to your RRSP deduction limit for that year.

Specified retirement arrangement – This is a pension plan that we do not register for income tax purposes and is either not funded or only partly funded.

Spousal or common-law partner RRSP – A spousal or common-law partner RRSP is:

• an RRSP to which the annuitant's spouse or common-law partner contributes;an RRSP that receives payments or transfers of property from RRSPs to which the annuitant's spouse or common-law partner has contributed; or
• an RRSP that receives payments or transfers of property from RRIFs to which the annuitant has transferred amounts from other spousal or common-law partner RRSPs.

Spouse – You have a spouse when you are legally married.

Unmatured RRSP – Generally, this is an RRSP that has not yet started to pay you a retirement income.

Unused RRSP deduction room at the end of the year – Generally, this is your RRSP deduction limit for the year minus the amount you deducted for RRSP and  Pension Plan contributions for that year.