The RRSP questions everyone asks but gets wrong answers to

The RRSP deadline isn't December 31st. Your contribution room doesn't reset every January. And no, you can't just throw money in there indefinitely.

These aren't obscure rules - they're the basics that trip up most Canadians every tax season. Here's what you actually need to know.

When can I contribute?

You have until March 1st to make RRSP contributions for the previous tax year. Not December 31st. March 1st of the following year.

So for your 2025 tax return, you can contribute until March 1, 2026. That contribution gets deducted from your 2025 income - even though you're making it in 2026.

The catch: your financial institution needs to receive the money by March 1st, not just process your transfer request. If March 1st falls on a weekend, you get until the next business day.

How much room do I have?

Your contribution room appears on last year's Notice of Assessment from the CRA. It's usually 18% of your previous year's earned income, up to the annual maximum - which is $32,490 for 2025.

But here's where it gets confusing: unused room carries forward indefinitely. So if you could have contributed $10,000 in 2023 but only put in $3,000, that extra $7,000 is still available to you now.

Your employer pension contributions reduce your RRSP room dollar-for-dollar. If your company put $2,000 into your pension plan, your RRSP limit drops by $2,000.

TaxSplit.ca will show you exactly how much RRSP room you have based on your income and province.

What counts as earned income?

Employment income counts. Self-employment income counts. Rental income counts. CPP disability benefits count.

Investment income doesn't count - no interest, dividends, or capital gains. Neither do CPP retirement benefits, OAS, or most other government transfers.

If you're getting spousal support, that counts as earned income for RRSP purposes. If you're paying spousal support, you can still deduct it from your income, but it doesn't create RRSP room for you.

Can I contribute to my spouse's RRSP?

Yes, but it uses your RRSP contribution room, not theirs. You get the tax deduction, but the money belongs to your spouse.

This works when one spouse earns significantly more than the other. The high earner gets the deduction at their marginal rate, but the money gets taxed at the lower earner's rate when withdrawn.

The three-year rule applies: if your spouse withdraws money within three years of your contribution, it gets taxed back to you instead of them.

When do I have to start withdrawing?

You must convert your RRSP to a RRIF or buy an annuity by December 31st of the year you turn 71. You can't contribute to an RRSP after that - your TFSA becomes the only registered account still accepting contributions.

Once you convert to a RRIF, you're required to withdraw a minimum amount each year. The percentage starts small - 5.28% at age 72 - and increases as you get older.

What if I over-contribute?

The CRA charges 1% per month on the excess amount until you withdraw it. So a $2,000 over-contribution costs you $20 every month until you fix it.

You get a $2,000 buffer - you can over-contribute by up to that much without penalty. But you don't get a tax deduction for the over-contribution, so there's no point.

If you realize you've over-contributed, withdraw the excess as soon as possible. The penalty stops the month you withdraw it.

The bottom line

Your RRSP deadline is March 1st, not December 31st. Your contribution room is on your Notice of Assessment and unused room carries forward. Once you hit 71, the contribution window closes forever.

Most RRSP mistakes come from waiting until the last minute and then making assumptions about the rules. Check your actual numbers first - don't guess.