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Registered retirement savings plan (RRSP)

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RRSPs

RRSPs

RRSPs: Save for retirement

  • You can grow the savings you put aside during your working life tax-free to supplement your sources of income during retirement.
  • At death, the plan can be transferred to your spouse with no tax consequences.
  • You can use your RRSP to help buy a home (HBP).
  • You can also use it to go back to school (LLP).
  • You must transfer your RRSP into an RRIF (registered retirement income fund) no later than December 31 of the year you turn 71.
  • BONUSDOLLARS can be redeemed to contribute to an RRSP
  • Anyone under 71 with income earned in Canada can contribute to an RRSP, no matter where they live.
  • The annual contribution limit is 18% of income earned in the previous year.
  • The maximum contribution for 2015 is $24,930 and for 2016 is $25,370.
  • Contributing to your employer's retirement plan reduces the amount you can invest in your RRSP.
  • You can contribute to your own RRSP or your legal or common law spouse's RRSP.
  • If you don't use all of your contribution room one year, you can carry the unused portion over to the following years.
  • See the "RRSP Deduction Limit Statement" section of the notice of assessment Canada Revenue Agency sends you each year.
  • You can make a maximum excess contribution of $2,000.
  • You may contribute to your RRSP until December 31 of the year you turn 71.

Borrowing to contribute to an RRSP

Investment methods

Investment by regular instalments

An easy and handy way to build your RRSP and integrate your contribution to your budget. To contribute at your own pace.

You choose the payment amount and frequency: weekly, monthly, every 2 weeks. The amounts are then deducted directly from your account and paid to the selected RRSP investment vehicle.

  • Bears fruit from the first day.
  • Deductible from your taxable income.
  • Entitles you to potential member dividends from your caisse.

Products to which you can contribute by regular instalments:

Investment by cash contribution

To contribute once at the end of the year or to shelter capital such as bonuses, vacation pay, retirement allowance, etc., your contributions can be made directly into your RRSP, with no deductions at source.

Products to which you can contribute cash:

  • Savings account only available on AccèsD Internet and mobile
  • Makes your savings grow quickly at a high interest rate
  • Zero risk
  • A variety of features and terms
  • Invest in stock markets with a safety net
  • Income and capital security
  • Recognized managers
  • Easy access to all markets
  • Portfolio diversification

Securities

  • With or without the help of an investment advisor
  • Stocks, bonds, exchange-traded funds and more

Learn more about full-service brokerage

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1. Desjardins Funds are offered by Desjardins Financial Services Firm Inc., a Desjardins Group company.

Deposit insurance:

Depending on which province your caisse is located in, deposits in each caisse are guaranteed2 by the Autorité des marchés financiers or the Deposit Insurance Corporation of Ontario, subject to their prescribed conditions.

Desjardins caisses in Quebec are registered with the Autorité des marchés financiers, in conformity with the terms of the Deposit Insurance Act. In Ontario, deposits in registered savings plans are insured for their total amount by the Deposit Insurance Corporation of Ontario (DICO). Other deposits in Canadian dollars are insured up to $100,000. To learn more about deposit insurance, visit the websites of the Autorité des marchés financiers and the Deposit Insurance Corporation of Ontario.

Important: Getting investment products online is quick and convenient. However, we strongly suggest that you meet with your caisse advisor, who will be able to help you work out the strategy that best suits your profile.

2. This guarantee does not apply to money invested in mutual funds or other investment vehicles whose value and returns fluctuate depending on market performance, such as stocks, bonds and Treasury bills, to name a few.

Compare RRSPs and TFSAs

RRSPs and TFSAs are 2 different registered savings plans that allow you to save money tax-free.

RRSPs: Save for retirement TFSAs: Save for a specific goal
An RRSP is a registered savings plan that allows you to build tax-free retirement savings while also reducing your tax load at the time of contribution. It is useful for:
  • saving for retirement
  • buying or building your first home
  • financing your education
A TFSA is a registered savings plan that allows you to put money aside tax-free to reach short-term goals throughout your life. It is useful for:
  • renovating your home
  • buying a car
  • starting a business
  • taking a trip

There may, however, be exceptions to these rules:

  • TFSAs may sometimes be better than RRSPs to save for retirement.
  • Borrowing from your RRSP to buy a home through the Home Buyer's Plan is often a very effective strategy.
  • A TFSA may also be useful when you have contributed the maximum to your RRSP and are seeking an additional tax deduction.

Determining which plan is better for you can be complex. Discuss it with your Desjardins advisor.

RRSP and TFSA comparison chart
  RRSP TFSA
Contribution deadline Febuary 29, 2016 January 1 to December 31 of current year
Age limit The year of your 71st birthday No
Contribution amount 18% of income earned the preceding year, up to $24,930 in 2015 and $25,370 in 2016

The participation to a pension plan offered by your employer reduces the limit of the annual contribution
Annual maximum (starting from age 18):
  • 2009 to 2012: $5,000
  • 2013 and 2014: $5,500
  • 2015: $10,000
  • 2016: $5,500
Are contributions income tax deductible? Yes No
Withdrawals Taxable Non-taxable
Investment income Non-taxable Non-taxable
Unused contribution room The unused portion of your maximum annual amount deductible since 1991 The unused portion of your maximum allowable contributions since 2009
Excess contributions Up to $2,000 above the maximum allowable annual contribution Not allowed
Impact of withdrawals on benefits from social programs Added to taxable income. None
Do withdrawals increase contribution room? No Yes, equal to the qualifying amount withdrawn1 and added to the contribution room for the following year.
Are spousal contributions allowed? Yes. The contributing spouse claims the tax deduction even if he or she not the beneficiary. No. However, money you give your spouse to contribute to a TFSA is not subject to attribution rules.
Taxable upon death? Yes, except if rolled over to spouse, or to minor or disabled child. Your spouse could add the amounts accumulated prior to death in their TFSA, without affecting their own contribution room.
Can it be used as collateral for a loan? No Yes

Eligible investments for RRSPs and TFSAs

Since RRPS and TFSAs are savings plans, you can invest in them using a wide range of eligible investment products.

Type of investment RRSP TFSA
Regular Savings Account
 
Tax-free savings account  
Guaranteed fixed-rate investments
Market-linked guaranteed investment
Desjardins Funds
Guaranteed investment funds - Helios2 Contract
Stock market securities
Surplus shares
 

Learn more about TFSAs

1. Following changes recommended by Finance Canada, withdrawals of overcontributions, non-qualified investments and amounts attributable to swap transactions, or of any related investment income, do not create additional TFSA contribution room. Some of this income will be taxed at 100%.

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