RRSP Deadline is March 1st each year. The date may varry and will be updated on this same page. March 1, is the deadline for contributing to an RRSP for this tax year. December 31 of the year you turn 71 years of age is the last day you can contribute to your own RRSP.
Mandatory RRSP Withdrawals at Maturity
Your RRSP reaches maturity on the last day of the calendar year you turn 71.
At this point, you can access your RRSP assets through 3 maturity options. The tax implications of your decision depend on the option that you choose.
Maturity Option #1: Make a Lump Sum RRSP Withdrawal
You can choose to withdraw all the funds in your RRSP as a lump sum, but the withdrawn amount will be subject to withholding tax. The withholding tax gets taken out of your withdrawal immediately and paid to the government.
Additionally, this amount must be added to your income when filing your taxes.
Maturity Option #2: Convert RRSP to RRIF
You can choose to convert your RRSP to a RRIF (Registered Retirement Income Fund). A RRIF gives you a steady flow of retirement income, with a minimum amount that must be withdrawn each year.
When converting from your RRSP to a RRIF, it’s important to keep a couple things in mind:
Annual withdrawals: You must make annual minimum withdrawals from your RRIF. These minimum withdrawals must be included in your taxable income each year but are not subject to withholding tax at the time of the withdrawal. Any amount withdrawn over the minimum amount will be subject to withholding tax. See the schedule for RRIF withdrawals.
You could run out of money: Your return might not exceed your RRIF withdrawal rate, in which case you could eventually outlive your savings.
Maturity Option #3: Purchase an Annuity
You can convert your RRSP to an annuity which offers a guaranteed income for life or for a specified period. Withholding tax is not applied on amounts that are used to purchase an annuity. You may have to pay tax on the income when you start receiving payments.
Withdrawing from an RRSP Before Maturity
Understanding the tax implications of withdrawing from your RRSP before maturity can help you decide if and when you should. If you make an early RRSP withdrawal:
- You pay a withholding tax: The withholding tax varies depending on the amount withdrawn and your province of residence.
- You pay income tax: Your withdrawals must be reported on your tax return as income. If your current income is higher than your retirement income, you’ll pay more taxes now.
- You lose out on tax-deferred compounding: Because RRSP contributions can compound over time, even a small withdrawal made today can have a big impact on your savings later.
- You lose your contribution room: When you withdraw funds from an RRSP, you permanently lose the contribution room you originally used to make your contribution.