From the moment we are able to understand the concept of money and "a hard day's work" we are encouraged to save for our future. It starts so simple: a little savings account with your name on it. I'm sure many of us can remember the pride we took in watching the number go up...

As we get older, saving become more complicated. It's no longer enough to simply put your money in a savings account and watch it grow. Now there are tax rules, savings strategies, penalties for early withdrawals, contribution limits, and so much more. 

Whether you are buying your first home or considering your retirement investment choices, there are registered plans and services that can help you save for your goals on a tax assisted basis. Most registered plans are designed to help you save for retirement and manage your income stream in retirement. This guide provides an overview of the benefits of registered plans and how they fit into your financial situation.

A Guide to Registered Products


Investing in a Registered Retirement Savings Plan (“RRSP”) is one of the soundest ways to ensure you enjoy a financially secure retirement. In order to maximize the benefits of an RRSP, it’s important to have a basic understanding of the rules that govern them.

Understanding the Basic Rules of RRSPs

A Registered Retirement Savings Plan remains the cornerstone of most retirement plans, particularly ifyou don’t have a company pension plan. An RRSP is a tax-deferred plan designed to help you save for retirement. With an RRSP, contributions are tax deductible and once in the plan, continue to grow on a tax-deferred basis until the funds are withdrawn. Any funds removed from the RRSP are taxed in the year they are withdrawn. At retirement, the money in the plan may be rolled into any of the RRSP maturity options where they continue to be tax sheltered, except for withdrawals made from the plan – which are treated as income – each year.

RRSP Savings, Tips & Strategies

There can be a temptation to withdraw funds from your Registered Retirement Savings Plan (“RRSP”) prior to your retirement. However, careful consideration should be given to the financial impact of this decision. Even though the Canada Revenue Agency (“CRA”) allows for withdrawals from your RRSP at any time, it is important to keep in mind that the funds in an RRSP are designed to provide you with income for the duration of your retirement years. When money is withdrawn from your RRSP, it is considered part of your taxable income and subject to income tax in the year of the withdrawal. If you place the funds in one of the qualified RRSP maturity options at retirement, you will be taxed only on the portion paid (i.e., withdrawn) to you each year. 

In short, withdrawing from your RRSP while you are still working will not only have taxable penalties at the time of the withdrawal, but it also adds to your overall annual income and could result in paying MORE taxes at income tax time!

RRSP Withdrawals

Tax-Free Savings Account

The Tax-Free Savings Account (“TFSA”) is a savings plan that allows Canadians to invest and earn tax-free returns. Any income that is interest, dividends, and capital gains, are earned tax-free. 

There are annual contribution limits that are set by the government that must be followed. You can, however, top up any missed contribution space as far back as either A) the year you turned 18 or B) the year the Tax Free program started (2009).

Be wary of over-contributing to your TFSA as you will have penalties for every month you have put too much into the account.

Tax-Free Savings Account

Locked-in Retirement Plans

While maintaining tenure with a single employer used to be the norm, recent statistics indicate that most employees will work for four or five different employers prior to retirement. If you are entitled to a vested pension benefit under a pension plan, each job transition may provide you with an opportunity to transfer your pension to a vested and locked-in registered plan. At retirement, these funds would be rolled into one or more of the locked-in maturity options designed to provide you with a lifetime income.

Locked-In Retirement Plans

Registered Retirement Income Funds

Selecting the right retirement income option for your Registered Retirement Savings Plan ("RRSP") is one of the most important financial and estate planning decisions you’ll make. This is especially true today, when statistics show that Canadians are living longer, healthier lives.  If you’re fortunate, your retirement will last 20 years, or longer. Therefore, it’s important to make sound investment choices that not only protect your savings but ensure that the purchasing power of your money lasts throughout your retirement. 

Registered Retirement Income Funds

A minimum amount must be withdrawn annually from your RRIF starting in the year after it is opened.

RRIF Payout Schedule

A RRIF is very much like an RRSP in reverse. An RRSP is an account designed to help you save for retirement – a RRIF is an account designed to provide annual income in the form of withdrawals from a registered plan during your retirement.

Tips and Considerations for RRIFs

Don't Ever Give Up On Your Savings Journey!

Saving for retirement, especially in today's economic conditions, can be strenuous and feel like a constant uphill battle. It's easy to feel overwhelmed with your options to save, and what exactly you're saving for. 

It's important to keep your "end-game" in mind at all time when thinking about your finances. A fulfilling and rewarding retirement can be in your future when you have the right advice on your side!

Retirement Strategies to Stay Focused on the Long Term