A Retirement Savings Plan (RSP)* is a government-approved plan you use to save money for your retirement years. Your contributions, within limits, are tax deductible, and the income earned is tax sheltered. We offer:
Island Savings can also lend you money to make your RSP contribution. A RSP loan gives you choice, flexibility, and a competitive rate.
Interested in finding out more? Check out our RSP/RRIF Basics online brochure (PDF) or our Retirement Income Options online brochure (PDF)—both chalked full of great information. You will need Adobe Acrobat Reader to view these PDF documents. If you do not already have Adobe Acrobat Reader, download this free software.
Convert to a RRIF
A RRIF is a tax-deferred retirement plan used to generate income from the savings accumulated from your RRSP plan.
Purchase a Life or Term Certain Annuity
An annuity guarantees that you will receive an income for life, or as long as the annuity contract specifies.
Get the cash
You can take your RRSP as cash, but it will be fully taxable in the year of.
Our expert advisors can help you to decide which investment route to take. We can help you to put together your RSP investment strategy. Choose from a full range of eligible RSP investment products to meet your needs and to give you the opportunity to maximize your RSP's potential for growth. Investment choices include:
Who can contribute to an RSP?
Anyone who earned income subject to Canadian taxation, including non-residents, may contribute to an RSP.
What is earned income?
Earned income includes salary or wages, rental income, alimony received, net business income, and Canada Pension Plan and disability benefits, etc. Earned income does not include investment income, retirement allowances, taxable capital gains, pension plans, etc.
When is the best time to invest in an RSP?
The sooner you get your money working for you, the more you'll have when you need it. That's the magic of compounding interest. Delaying can cost you more money than you think. The best time to start is as soon as you have earned income and as early as possible in the current tax year.
How much can I contribute each year?
The maximum RSP contribution you may deduct for the current year is 18% of your earned income for the prior year up to the maximum of $24,930 less your pension adjustment (PA).
Unused RSP contributions from 1991 onward can be carried forward to subsequent years indefinitely. RSP contributions need not be used as a deduction in the taxation year they are made. There is no limit on when the deduction may be claimed.
If you have questions about your contribution limit, you can call the automated Tax Information Phone Service (TIPS) at
1-800-267-6999 or register at My Account on the Canada Revenue Agency website.
How can I make RSP contributions if I don’t have the money?
If you have a hard time coming up with the cash to make your maximum RSP contribution, you have these options:
What if I need my RSP savings before I retire?
You can make withdrawals from your RSP in whole or in part, provided your investment options are redeemable at the time. The money you withdraw is taxable and will be reported on a T4 RSP by the issuer of the plan.
You can withdraw a maximum of $20,000 over a four-year period (maximum $10,000 per year) to finance your education—full-time training or higher education of at least three months duration. Repayment to your RSP must be completed within 10 years.
If you are a first-time homebuyer, you can withdraw up to $25,000. All withdrawals have to be paid back to an RSP within 15 years.
What is a spousal RSP?
With a spousal RSP, you can direct part or all of your maximum allowable contribution to an RSP in your spouse's name. A spousal RSP will help you save tax during retirement through income splitting, since the income eventually created from the funds will then be taxed at your spouse's lower tax rate.
What if I don't use my maximum RSP deduction limit in a given year?
Your unclaimed RSP deduction limit from 1991 onward can be carried forward indefinitely. In addition, you do not need to claim your RSP contributions as a deduction in the taxation year that they are made.
When can I close my RSP?
You may close your RSP at any time, but you must do so before the end of the calendar year in which you reach age 71. You can choose to
The Income Tax Act provides three retirement income options:
As a retirement income option, you can also set up a self-directed RIF through Island Savings.
When will my RSP be subject to tax?
Your RSP helps you look forward to your retirement by allowing you to pay yourself in the form of tax-sheltered contributions. Any growth within your RSP is not subject to income tax until you withdraw the money. So your savings accumulate and grow tax-free.
Ready to invest? Creating an investment plan with Island Savings Insurance Services is simple!
Let us know when you'd like to book an appointment to talk to an expert advisor about your investment goals.
If you'd rather come in to see us, we'd be happy to open a new investment account for you or make changes to your existing portfolio.
If you’d like to call us, here is a complete list of our expert advisors.