Registered Retirement Savings Plans (RRSPs) are another way to save for retirement. When you contribute to an RRSP, it can help reduce the taxes on your income during your working years. While your money is in an RRSP it is usually tax exempt as long as the funds remain in the plan. In retirement, any funds withdrawn will likely be taxed at a lower rate as you will presumably have less income in your retirement years.
Each year, the Canada Revenue Agency (CRA) places limits on how much money you can shelter from taxation in a registered plan. As a result, when you belong to a registered pension plan like the UBC SPP, the amount of money you may contribute to an RRSP is lower than if you didn’t belong to a pension plan. Your annual contribution room is reduced by your pension adjustment (PA), which is the value of the pension you accrued in the SPP during the prior tax year.
RRSP Contribution Deadline
The last date that you can make contributions to an RRSP for the 2023 contribution year is February 29, 2024.
Additional Resources
For more information on how to calculate your pension adjustment and how it affects your RRSP contribution room, visit the RRSP Contributions and Pension Adjustments page and the Pension Adjustment calculator in myPension.
Listen to the Pension Airwaves podcast episode, “Taxes and Your Pension,” to learn more.