Mozaic Finance glossary Registered accounts

RRSP: the Registered Retirement Savings Plan, explained

The RRSP is the workhorse retirement account in Canada: you deduct contributions from your taxable income now, and pay tax later when you withdraw, usually at a lower rate in retirement.

A Registered Retirement Savings Plan (RRSP) is a registered account designed to help Canadians save for retirement. Its defining feature is the tax deduction: money you contribute reduces your taxable income for the year, and the investments grow without being taxed until you take them out.

How an RRSP works

  • Contribution room is 18% of your prior-year earned income, up to an annual maximum set by the CRA, minus any pension adjustment.
  • Contributions are tax-deductible, so they lower the income tax you owe for the year.
  • Investments grow tax-deferred: no tax on growth until you withdraw.
  • Withdrawals are taxed as ordinary income in the year you take them.
  • The Home Buyers' Plan and Lifelong Learning Plan let you borrow from your RRSP tax-free for a first home or education, if you repay on schedule.
  • You must convert your RRSP to a RRIF or an annuity by the end of the year you turn 71.

How Mozaic tracks your RRSP

In Mozaic, RRSP is a first-class account type. Connect a brokerage RRSP through SnapTrade to pull holdings and cost basis, connect a bank RRSP through Plaid, or add one by hand, and it rolls into your net worth.

Mozaic publishes a free RRSP contribution room calculator that estimates this year's room from your earned income and pension adjustment. Your exact figure also depends on unused room carried forward from past years, which lives in your CRA My Account and Notice of Assessment, so treat the calculator as a quick estimate and confirm the official number with the CRA before you contribute.

Related on Mozaic

Related terms

Track every account in one place

14-day free trial, no credit card. Connect your registered and non-registered accounts, or add them by hand, and see your real net worth in one number.

Start the 14-day trial
Read-only connections · Cancel anytime

Frequently asked

Yes. Money you contribute to an RRSP reduces your taxable income for the year, which is the account's main advantage. You pay tax later, when you withdraw, ideally at a lower rate in retirement.
You must convert your RRSP to a RRIF or an annuity by the end of the year you turn 71. After that, the RRIF pays out a minimum taxable amount each year.
Mozaic has a free RRSP contribution room calculator that estimates this year's room from your earned income and pension adjustment. Because the exact figure also depends on unused room carried forward from past years, which lives in your CRA My Account and Notice of Assessment, use it as a quick estimate and confirm the official number with the CRA before you contribute.