Did you know Canadians had over $1.5 trillion in unused RRSP contribution room in 2021, according to CRA? That’s an enormous pool of missed opportunity, funds that could have reduced tax bills, grown tax-free, and accelerated retirement goals.
Every dollar you contribute today can significantly impact your long-term financial security. Here’s how to make the most of your RRSP before the deadline hits.
First Things First: The 2025 RRSP Deadline
The RRSP contribution deadline for the 2024 tax year was Monday, March 3, 2025.
Contributions made by this date can be deducted from your 2024 taxable income, lowering your tax bill or boosting your refund.
Past that deadline, you can still contribute for future years, but contributing now lets you benefit from immediate tax savings.
Benefits of Maximizing RRSP Contributions
Immediate Tax Savings
Contributions reduce your taxable income, resulting in a smaller tax bill or a larger refund.
Tax-Deferred Growth
Investments inside an RRSP grow tax-free until withdrawn, compounding returns faster than in taxable accounts.
Lower Retirement Tax Bracket
Withdrawals are taxed in retirement, often at a lower rate than during working years, making your deductions now even more valuable.
Carry-Forward Contribution Room
Didn’t max out last year? Unused contribution room carries forward indefinitely.
RRSP Contribution Limits for 2025
For 2025, CRA has increased the contribution ceiling to 18% of your income, capped at $32,490.
Have unused contribution room? Great news: you can top up past years, too.
To check your exact limit, log in to CRA My Account or refer to your latest Notice of Assessment.
5 Smart Strategies to Maximize Your RRSP
If you’re looking to make the most of your RRSP, consider these strategies:
1. Contribute to a Spousal RRSP
This income-splitting tool allows the higher-income spouse to contribute on behalf of the lower-income spouse. It helps lower your combined household tax bill today and in retirement.
2. Start Early in the Year
Don’t wait for next March. Contributing earlier gives your investments more time to grow tax-free.
3. Reinvest Your Tax Refund
Received a refund from your RRSP contribution? Reinvest it back into your RRSP or TFSA to double the benefit.
4. Consider an RRSP Loan
Short on cash? An RRSP loan may let you contribute now and use your tax refund to repay the loan quickly. But weigh interest costs carefully.
5. Coordinate RRSPs and TFSAs
RRSPs offer upfront deductions; TFSAs offer tax-free withdrawals. Using both strategically creates a balanced, tax-efficient retirement income plan.
Final Thoughts
The RRSP contribution deadline is a key financial milestone that shouldn’t be overlooked. By planning ahead and maximizing your contributions, you can reduce your tax bill, grow your retirement savings, and create a more secure financial future.
Not sure how much to contribute or which strategy is best for you? A personalized retirement plan can help ensure you’re making the most of your RRSP and other savings opportunities.