Canada Retirement Savings Plan (RRSP)

A tax saving investment plan for your retirement

The Government of Canada introduced a Canadian retirement savings plan in 1957, commonly known as Registered Retirement Savings Plan or RRSP. The plan offers tax-saving benefits to its citizens, to encourage them into investing in their retirement from an early age.
To have an RRSP account it is essential for one to either be employed or have a source of income. It is one of the key eligibility factors to own an RRSP. There are various types of RRSP plans you can choose from to invest depending on your requirement.
1. Individual RRSP – This option is for individual contributors who wish to save for their own retirement.
2. Spousal RRSP – This option is for an individual willing to save and contribute to their spouse's retirement. Contributing to spousal RRSP gives you the tax benefits, however, the spouse remains the account holder and beneficiary.
3. Group RRSP – Many employers choose to set up a group RRSP plan for their employees. Contributions in such group accounts are made through payroll deductions, thus reducing their overall tax burden.

What are the tax-saving benefits of investing in an RRSP?

The contributions made to an RRSP helps in the reduction of your annual taxable income bill.
The contributions made to an RRSP grow over time and interest earned remain tax-deferred until withdrawn.

Other benefits of investing in a Registered Retirement Savings Plan Canada

An RRSP gives you complete control of your investment. You can decide on how much and how often you wish to contribute to your account, which can be changed as per your convenience. Also, you can choose to pause your contributions at any time.
The money invested in RRSP can be borrowed to pay for buying a home or to pay for the education of your spouse or your legal RRSP partner. This money needs to be invested back within the given time period.
In case your income money falls short on decided monthly or annual contributions, the same can be covered in the corresponding months or years.

Contributions and Withdrawals from an RRSP

Contributions to an RRSP account:
  • An individual can choose how often they wish to contribute to their RRSP plan. They can choose to contribute weekly, bi-weekly or monthly as per their income and other investment plans.
  • There is a limit on the total annual contributions one can make in their RRSP, and this limit differs from year to year.
  • For instance, in 2021 an individual can contribute a total of 18% of their total annual income to a maximum of up to $27,830 in the year.
Withdrawals from an RRSP account:
  • Any withdrawals from an RRSP are taxable at any age. However, the tax bill shall remain high if the withdrawals happen at an early age.
  • You can borrow money from your RRSP at any time to buy a house or pay for your or your spouse’s education. However, there are certain borrowing limitations:
    • The borrowing limit in an RRSP for a home buying plan is $35,000.
    • The borrowing limit in an RRSP for a lifelong education plan is $10,000 annually to a maximum lifetime limit of $20,000.
  • Your RRSP matures at the end of the year you turn 71 years of age. Post this, you need to stop your contributions and convert your RRFP to an RRIF (Registered Retirement Income Fund) or annuity. With this, your contribution stops and receiving of your retirement income begins.
An RRSP gives you the option to invest the accumulated funds in your account. At MILIFE we not only provide you the perfect Registered Retirement Savings Plans Canada but also the best investment options to choose from. We are considered amongst the top investment advisors in Canada. Let’s get in touch and plan your retirement savings options wisely.

Sample illustration of MILIFE Parent Plan Cash / Retirement income & Life Insurance values

Case Study:
Male: Age 35, Non- smoker, Standard Health.
Mortgage & other loan balance total up to $500,000.
Retirement age 65.
Premium payable until age 65, for 30 years.
Retirement income from age 66.
Based on monthly premium of $500 to age 80.
Net Cash Value Age Net Life Insurance value(Tax Free)
$0 35 $750,000
$50,006 45 $803,256
$101,785 55 $910,762
$165,707 65 $665,100
$283,609 75 $764,307
$561,463 85 $849,537
$1,006,416 95 $1,270,037
Age 35- 65: Annual
deposit of $6000
Age 66- 80: Tax free annual retirement income of $22,690 ie., for 15 years
This example is strictly for illustration purposes only & value may differ.

Personalise your MILIFE Parent Plan

Request an illustration to see how much cash value & life insurance you will have.
*Illustrations are reflective of the annual premium amount.