What is the maximum a person can contribute to an RRSP?

Jamie Golombek, vice-president of taxation and estate planning at AIM Trimark Investments, has the answer.

Jamie Golombek 16 February, 2004 | 2:00PM
Dear Expert:

Is there a maximum allowable to contribute in total to an RRSP?"

Expert Answer:

The maximum amount that you can contribute to an RRSP is based on your RRSP contribution limit. This limit is equal to the lesser of the annual maximum (see chart below) and 18% of your prior year's earned income. Earned income typically includes employment income, royalty income and rental income but does not include investment income. RRSP contribution room is cumulative since 1991 and builds each year indefinitely if not used.

Each Canadian who is at least 18 years old is also allowed to contribute a once-in-a-lifetime over-contribution of $2,000 to their RRSP without penalty. No deduction is available for this amount unless the individual has earned income.

Year RRSP deduction limit
2005 $16,500
2006 $18,000
2007 $19,000
2008 $20,000

To find out how much an RRSP contribution may save you, try Morningstar's RRSP Calculator.

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Jamie Golombek

Jamie Golombek