RRSP contribution limits

The maximum contribution limit is $25,370 for 2016 and is indexed for inflation for each subsequent year.

To make the most effective use of your RRSP, there are several things you can do:

  • Depending on the type of investment, you can either contribute to your RRSP early in the year (for fixed income investments) or at regular intervals throughout the year (for most mutual funds) rather than at the end of the contribution year—that way, you can benefit from income sheltering and dollar cost averaging (for investments that fluctuate in value).
  • If you make regular contributions to an RRSP,consider applying to have your income tax withholdings reduced on your paycheque—this will improve your monthly cash flow. To do this, simply submit Form T1213 to the CRA for authorization. Once authorized, your employer will be able to reduce the amount of taxes withheld from your pay.
  • Pay your RRSP administration fee directly instead of from inside your RRSP—this helps maintain capital in your plan, allowing it to grow on a tax-deferred basis.
  • You don’t need to deduct your contribution in the year it’s made. If you’re expecting to be in a higher tax bracket in the future, consider delaying your deduction until that time—you’ll receive a larger tax savings if the deduction is taken when you’re in a higher tax bracket.
  • Consider filing tax returns for children or other low- income earners to create contribution room that can be used in the future.