How to Set up an RRSP

Have you been thinking about retirement recently? If you have, then the thought of a registered retirement savings plan may have come up. However, if you do not have one yet, you may be wondering how you precisely and when you should set one up? This blog will discuss how you can set one up and how to prepare yourself for retirement successfully.

What is an RRSP?

An RRSP (registered retirement savings plan) is an investment account that you make to put money into to save for your retirement. This money is what you will be living off of once you finish working and are retired. There is no limit to how many RRSP accounts you have and what financial institutions. Although many confuse an RRSP as a mutual fund, it is a personal pension that you are adding to.

Employment RRSP Program?

Before setting one up, you should double-check with your employer to see if you have an RRSP program. If your company does, you should speak with your employer for more information. Most companies with this program take out a small portion of your paycheck per pay period and put it aside for your RRSPs. If you happen to change jobs, you do not need to worry about losing this money. All the money your employer took out is vested, so it will stay with you, whether you stay or go to another job. This protection offers you much freedom with employment. 

Investment Strategy

Whether or not you have an RRSP program with your employment, you must start figuring out how you want to invest your money. There are various strategies and methods when adding money to an RRSP. The main thing is to consider how much money you can add to the account, based on your employment and how often you can add. You do not want to put too much at a time, as this can create financial difficulties. Yet you also do not want to put too little, as you will unfortunately not have enough once you are retired. If you are having trouble figuring out a plan on investing, speak with a financial specialist. They can look at your financial situation and provide you with a rational payment plan.

Look Around

Now that you know how you will invest in your RRSP account, It is time to look around for a financial institution or brokerage to make your RRSP. When looking around, you will want to look for reasonable rates. When searching, it is essential to take your time, like every bank and financial institution has different options. When you go to each brokerage, financial institution, or bank, ensure that you ask them about what investment options they offer and what fees they have. Although you may find a place that provides excellent opportunities, they may have high fee rates. Do not choose an RRSP with a company if you are not impressed with all conditions. It may take time, yet when you find an RRSP plan that works perfectly for you, it will be well worth it. 

Complete the Required Application Process

Once you have found a company that provides an RRSP plan that works well for you, it is necessary to fill out their application documentation. The company wants you to complete this so that they can get a better sense of why you are signing up for the account. There may be questions included, including your investment goals and what you plan to contribute to your RRSP. Once you have completed the documentation, they will want to speak with you further on the RRSP. They will go over the documentation in more depth and the terms and conditions of the RRSP. They want to ensure that you know all the essential details of your new account before you start investing in it. 

Begin Investing

After setting up your RRSP, you can now start investing in it. You can either add money whenever you want or set up an automatic deposit into the RRSP through a pre-authorized debit. It is okay to gradually increase your deposits into the account over time, as this is a new payment for you, and it will take time to adjust. 

Common Questions and Answers

Although we have covered how to set up an RRSP exactly, there are still a few questions that you may have. Consider the following questions and answers.

Question 1: How old do you have to be to set up an RRSP?

Answer: There is no age that you need to be, yet you need to have employment and file a tax return. So the minimum that you need to be is at least 18. 

Question 2: Is the money in your RRSP tax-free?

Answer: No, the money you put into the account will be taxed when you take it out. Yet if you are taking this money out once you are retired, you can be assured that the tax will be less since you have no income.

Question 3: Is there a time when I need to take my money out of the RRSP?

Answer: You are safe to keep your money in your RRSP until 71. Once you reach this age, the government requires you to remove your money from the account. Keep in mind, though, that if you take out all of your money at the same time, you will receive a large tax bill that year. 

After examining what an RRSP is, setting one up, and common questions that people have, you should feel more confident with setting up your own. Getting ready for retirement can cause anxiety, yet you have nothing to worry about when you have a plan set in place!

If you have any questions or concerns about setting up an RRSP, please reach out to me!

Sherry Corbitt, Mortgage Broker


-Di Verdi, Stefania (2013). Setting Up an RRSP For the First Time. Money Sense. Retrieved from

-Efron, Sarah/ Gerlsbeck, Rob (2015). Money Sense Answers Your 20 Burning RRSP Questions. Maclean’s. Retrieved from

-Ontario Securities Commision (2021). Opening an RRSP: 5 Steps to Open an RRSP. Retrieved from