The Foundation Of Your Financial Security – RRSP's

Over recent years, it has become more and more apparent that Canadians may have to fund their retirement through personal savings. The most tax-efficient way to save for your retirement is through a Registered Retirement Savings Plan (RRSP).

An RRSP is a tax-deferred account designed to help you save for retirement. Contributions reduce your taxable income today, and your investments grow tax-deferred until you withdraw them.

Key Benefits

• Contributions are tax-deductible, directly lowering the income tax you pay in the year you contribute. • All investment growth inside the plan is tax-deferred — you pay no tax on it until the money is withdrawn.
• For 2026, you can contribute up to 18% of your prior year's earned income, to a maximum of $33,810, plus any unused room carried forward from previous years.
• A Spousal RRSP allows higher-income earners to split future retirement income with a spouse, often reducing the couple's combined tax bill in retirement. 
• The Home Buyers' Plan allows first-time home buyers to withdraw up to $60,000 tax-free toward a home purchase, provided it's repaid over time.
• Withdrawals are taxed as ordinary income in the year they're taken, and the plan must convert to retirement income (typically a RRIF) by the end of the year you turn 71.

FHSA — First Home Savings Account

An FHSA is purpose-built for first-time home buyers, combining the tax deduction of an RRSP with the tax-free growth of a TFSA — all aimed at one goal: a future down payment.

Key Benefits

• Contributions are tax-deductible, just like an RRSP, directly reducing your taxable income for the year.
• Investment growth and qualifying withdrawals toward a first home are completely tax-free, just like a TFSA — the best features of both accounts, purpose-built for a home purchase.
• For 2026, the annual contribution limit is $8,000, up to a lifetime maximum of $40,000, with up to $8,000 of unused room carried forward to the following year.
• A qualifying withdrawal toward a first home requires no repayment, unlike the RRSP's Home Buyers' Plan.
• It can be combined with the Home Buyers' Plan, allowing a client to pair FHSA savings with up to $60,000 from an RRSP for the same home purchase — meaningfully accelerating a down payment.
• Each spouse or partner can open their own FHSA, doubling a household's potential tax-sheltered down payment savings.
• The account must be used toward a qualifying home purchase within 15 years of opening it, or by the end of the year you turn 71, whichever comes first; otherwise remaining funds are transferred to an RRSP or withdrawn as taxable income.

Effective Savings With A Tax-Free Savings Account

The Tax-Free Savings Account (TFSA) was introduced by the federal government in the 2008 budget and has been heralded as the most important new savings vehicle since the inception of the Registered Retirement Savings Plan (RRSP). Whether saving for a specific financial goal, complementing their existing retirement savings or putting money aside for emergencies, Canadians have embraced the TFSA as a key investment and savings account.

A TFSA lets Canadian residents 18 and older invest after-tax dollars, with all growth and future withdrawals completely free of tax — for life.

Key Benefits

• All investment income, growth, and withdrawals are 100% tax-free, with no tax slip and nothing to report at tax time.
• For 2026, the annual contribution limit is $7,000, and unused room carries forward indefinitely. Someone who has been eligible since 2009 and never contributed could have up to $109,000 in available room today.
• Withdrawals are never counted as income, so they have no effect on income-tested benefits like Old Age Security.
• Withdrawn amounts are added back to your contribution room the following calendar year, giving the account long-term flexibility.
• There's no mandatory withdrawal age and no maturity date — funds can simply stay invested for life.

RESP — Registered Education Savings Plan

An RESP helps families save for a child's post-secondary education, with the federal government adding direct grant money on top of what you contribute.

Key Benefits

• The Canada Education Savings Grant (CESG) adds 20% on the first $2,500 contributed per beneficiary each year — up to $500 annually and $7,200 over the child's lifetime, in effect free money toward their education.
• Investment growth inside the plan is tax-deferred while the funds remain in the account.
• When funds are withdrawn for education, the growth and grant portion are taxed in the student's hands, typically resulting in little to no tax given a student's lower income and available credits.
• Original contributions can always be withdrawn tax-free, since they were made with after-tax dollars in the first place.
• The lifetime contribution limit is $50,000 per beneficiary with no annual cap, allowing flexibility for either steady contributions or lump sums.

Non-Registered Investment Account

A non-registered (or “open”) account carries no government-imposed contribution limits or restrictions, making it a flexible complement once your registered accounts are fully used.

Key Benefits

• No contribution limits and no age restrictions — invest as much as you'd like, whenever you'd like.
• Capital gains receive preferential tax treatment: only 50% of a capital gain is included in your taxable income, so gains are taxed at roughly half your normal rate.
• Eligible Canadian dividends qualify for the dividend tax credit, which can meaningfully reduce the tax owed on that income.
• For clients in a professionally managed account, such as our AMA program, investment management fees charged on a non-registered account are generally tax-deductible as a carrying charge — a benefit that does not apply to fees charged inside an RRSP or TFSA.
• Full flexibility to deposit or withdraw funds at any time, for any reason, with no penalties or repayment requirements.