RRSP Quick Facts 2018: RRSP deadlines, contribution limits, and more

It's that time again when Canadians go out and buy RRSPs for the past year. Here are some of the rules and regulations for RRSPs so you can make good RRSP decisions this year.

Who is eligible to buy RRSPs?

Anyone who has earned income, has a social insurance number and has filed a tax return can contribute to an RRSP up until December 31 of the year they turn 71. After this age if you continue to have earned income, you can contribute to a Spousal RRSP up until December 31 of the year your spouse turns 71.

This maximum age was increased from 69 to 71 in the 2007 Federal budget, giving people an additional two years to contribute.

Maximum contribution limits

ChecklistYour allowable RRSP contribution for the current year is the lower of:

  • 18% of your earned income from the previous year, or
  • The maximum annual contribution limit (See chart) for the taxation year less
  • Any company sponsored pension plan contributions (PA – pension adjustment)
Tax YearIncome fromRRSP Maximum Limit


  • A Past Service Pension Adjustment (PSPA) arises in rare instances where a member of a pension plan has benefits for a post-1989 year of service upgraded retroactively.
  • Pension Adjustment (PA) represents the value of any pension benefits accruing from participation in a registered pension plan or deferred profit sharing plan.Notes

Earned income

For most people, earned income for RRSP purposes is the amount in box 14 of their T4 slips.

Earned income also includes self-employed net income, CPP/QPP disability payments and net rental income.

Income sources that do not qualify as earned income include investment income, pensions (including DPSP, RRIF, OAS, and CPP/QPP income), retiring allowances, death benefits, taxable capital gains and limited-partnership income.

Revenue Canada's Form T1023 (Calculation of Earned Income) outlines all sources of earned income.

Obtaining your contribution limit

After processing your tax return, Revenue Canada sends a Notice of Assessment, which includes your next years' contribution limit. This document also shows your unused contribution room.

Or you can call your local Tax Information Phone Systems (TIPS) number, which is found in the blue pages of your phone book under Tax Services. Be sure to have your SIN and previous tax return ready.

Contributing securities

You don't necessarily need cash to make an RRSP contribution. You can contribute (in kind) a security you already own outside your RRSP.

The “in kind' contribution is equal to the fair market value of the security when contributed. The security is deemed to have been disposed of at time of contribution. Be aware that this can have tax consequences.

Unused/carry forward contribution room

RRSP contribution room accumulated after 1990 can be carried forward to Subsequent years. If you are unable to maximize your RRSP contribution this year, you are allowed to make up the difference in later years.

Over contribution

The $2,000 lifetime over contribution allowance applies to those who have reached age 18 or older.

Your over contribution can be used as a deduction in future years. ($2,000 over contribution this year an be used as part of your deduction in the following year.

Any amount in excess of $2,000 will be charged a penalty of 1% per month.

Spousal RRSP

All or a portion of your RRSP contribution can be made to an RRSP in your spouses name.

As the contributor, you get the deduction, but your spouse is the owner of the plan. This includes common-law spouse as defined by Revenue Canada

There can be tax implications when spousal funds are withdrawn.

RRSP deadline to receive a tax deduction

The deadline for a RRSP tax contribution is always 60 days after the end of the previous year to be eligible for a deduction for the 2017 tax year. This year the RRSP deadline is March 1, 2018. Consult with your financial institutions about how they are able to accommodate deadlines.

Contributions made in the first 60 days of the year can be applied against the previous taxation year or in any subsequent year.

If you are turning 71, this is the last year in which you may contribute to your RRSP. You must convert your RRSP by December 31 in the year you turn 71.

What is the Home Buyers' Plan?

With the Home Buyers' Plan (HBP), you can, take up to $25,000 out of your RRSP to put towards the down payment on your first home and you won't be taxed on it. However, you do have to pay it back into your RRSP over the next 15 years.

Lifelong Learning Plan (LLP)

With the Lifelong Learning Plan (LLP), you can withdraw up to $10,000 a year, or up to $20,000 in total each time you participate in the LLP to help pay for your education. All you have to do is repay at least 10% per year for up to ten years.

Participants must start to make repayments two years after their last eligible withdrawal, or five years after the first withdrawal, depending on which due date comes first. Amounts withdrawn must be repaid within 10 years.

Written by Jim Yih

Jim Yih is a Fee Only Advisor, Best Selling Author, and Financial Speaker on wealth, retirement and personal finance. Currently, Jim specializes in putting Financial Education programs into the workplace. For more information you can follow him on Twitter @JimYih or visit his other websites Group Benefits Online and Advisor Think Box.

14 Responses to RRSP Quick Facts 2018: RRSP deadlines, contribution limits, and more

  1. Nice article! Correct me if I am wrong please, but in reading this it looks like you can’t contribute more than the RRSP maximum limit even if you have more contribution room that has carried over from previous years. Am I right in this understanding?

    • I believe you can contribute any carried over room from previous years as well. So if your total contribution room is $50,000 as of 2015, then that’s how much you can contribute this year without over contributing.

  2. Jim,

    I have a bone to pick about this article, about a misconception about RRSPs.

    Just like one doesn’t buy a savings account, one cannot buy an RRSP. Just like you can’t buy a TFSA or an RESP.

    It’s a type of financial account. You can only open one (or more than one) or close it. But you can’t buy it.

    You open an RRSP then contribute or deposit money in the RRSP to then buy stocks, bonds, mutual funds, closed end funds, or even just deposit money there.

  3. Husband in long term disability, I am unable to work so will have zero income. Can I cash in a spousal rrsp to pay mortgage? Our mortgage is 13,000 and we have $14,000 in rrsp. We would like to pay mortgage off.

    • In generation, You can withdraw your rssp funds anytime.
      The amount will be added to your income for the year and there will be withholding tax.

      Withdrawal Amount % Federal Tax Withheld
      From $0 to $5,000 10% (5% in Quebec)
      From $5,001 to $15,000 20% (10% in Quebec)
      Greater than $15,000 30% (15% in Quebec)

      You may get some of this withholding tax back when u file your tax return for the year.

      • Ws,

        The amounts stated are the gross amounts withdrawn; the tax percentage will be applied on that gross amount and you will receive the remainder.

        Note that these are cumulative amounts for the calendar year. If you withdraw three gross amounts of $5,000 you will be changed on the cumulative withdrawals. (It gets a little complicated as to how much tax is withheld – I did it once).

        Since GST/HST is applied on the withdrawal fees charged on each withdrawal, a litlle planning would be a good idea.

    • Karen,

      You need to find an expert on RRSPs.

      There are reams of rules about RRSPs. Therefore an expert will be hard to find because they can answer your questions but they may not offer other information that you have not brought up, since you’re not an expert and have not encountered the myriad situations than can occur after your RRSP actions.

      (Long sentence? RRSPs are extremely complicated and may hold multiple surprises because of all the subtle and obscure rules.)

      I have a question? Why would you want to do such a move?

    • This info from the CRA website.
      Your RRSP contributions must stay in the RRSP for at least 90 days before you can withdraw them under the HBP. If this is not the case, the contributions may not be deductible for any year.

  4. I’ve recently retired and got sevrance pay, bought some past entitlements to spruce up my DB pension & paid that with savings and part of an RRSP, etc; so its a complicated tax return this year, for me anyways and I want to have things done properly so there’s no comeback from CRA. Can you recommend anyone in the Montreal Quebec area that is highly familiar with the rulebook concerning my situation described above? I’ve looked at http://www.ats-accounting.ca/about-us/ and they even have a quote from you, Jim. Are they a reputable and trustworthy place to do business with?

    Thanks a bunch!

  5. Can a person have both a RRIF and an RRSP?

    I have converted my RRSP to a RRIF but there may be instances in the next few years (I’m 60) that I may want to contribute to an RRSP to get the tax break … can you leagally have both?

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