A Registered Retirement Savings Plan (RRSP) is a savings account where your contributions reduce your taxable income for the year. The money grows tax-deferred until you withdraw it - typically in retirement when your income (and tax rate) may be lower. You can contribute up to 18% of your previous year's earned income, up to an annual maximum set by CRA. Your unused room carries forward, so you can catch up in future years. CRA shows your RRSP room on your Notice of Assessment. You pay tax when you withdraw the money. The goal is to withdraw in retirement when you are in a lower tax bracket than when you contributed. Contributions made in the first 60 days of the calendar year can be applied to either the previous or current tax year. Check CRA for the exact deadline each year. The Home Buyers' Plan (HBP) allows first-time homebuyers to withdraw up to $35,000 from an RRSP, tax-free, to buy a home. Repayments must be made over 15 years.