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RRSP limit rises for 2021

The Registered Retirement Savings Plan contribution limit has increased by $600 in 2021.

The federal government updates three important numbers every year that relate to retirement savings.

I touched on two in a recent post – Registered Retirement Income Fund (RRIF) withdrawals and Tax Free Savings Account (TFSA) contribution levels for 2021.

The third is Registered Retirement Savings Plan (RRSP) contribution limits. The Canada Revenue Agency (CRA) adjusts that each year based on inflation. For 2021 the limit has been raised by $600 to $27,830.

You can contribute 18% of your 2021 earned income or $27,830, whichever is less.

For example, someone earning $100,000 in 2021 could contribute $18,000 ($100,000 x 18%).  Someone earning $200,000, could contribute $27,830, as 18% x $200,000 = $36,000, which is above the maximum.

The articles below explain the ins and outs of RRSPs, Registered Retirement RRIFs and TFSAs.

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