RRSP tax tips in Canada

You set up a registered retirement savings plan account through a financial institution such as a bank, caisse populaire, or credit union. Your financial institution will advise you on the types of RRSP and the investments they can contain.

You may want to set up a spousal or common-law partner RRSP. This type of plan can help ensure that retirement income is more evenly split between both of you. The benefit is greatest if a higher-income spouse or common-law partner contributes to an RRSP for a lower-income spouse or common-law partner. The contributor receives the short term benefit of the tax deduction for the contributions, while the annuitant, who is likely to be in a lower tax bracket during retirement, receives the income and reports it on his or her tax return.

You may want to set up a self-directed RRSP if you prefer to build and manage your own investment portfolio by buying and selling a variety of different types of investments. For details about eligible investments, see below. If you are considering this type of RRSP, be sure to consult with your financial institution.

Self-directed RRSPs

A self-directed RRSP allows you to build and manage your own investment portfolio by buying and selling a variety of different types of investments. This page gives details about eligible investments. If you are considering this type of RRSP, be sure to consult with your financial institution.

You can contribute certain property to a self-directed RRSP, such as a mortgage, shares, cash, bonds, or a unit of a mutual fund trust. For some contributions, you may have to include an amount in your income.

Note
You do not need to report any transactions for items held in your RRSP.
For example, you do not report interest earned in the RRSP on your tax return, as this is an investment transaction of the RRSP itself.
However, any money you remove from the plan is no longer sheltered from taxation and you must report it on your return.