You’ve invested in your business, but have you invested in your retirement?

Registered Retirement Savings Plan (RRSP)

What is an RRSP? It’s a registered savings plan that allows you to accumulate funds for retirement. Funds contributed to an RRSP are deductible from your income, within certain limits. All registered investments grow tax-deferred. Funds may be invested in various investment products to claim a tax deduction and avoid penalties. Please note that your contributions must not be more than your RRSP contribution room. For the 2024 tax year, the limit is $31,560 — until March 03, 2025 — minus any applicable pension adjustments, plus unused RRSP contribution room from prior years, and pension adjustment reversal.

If you’re unsure what your RRSP contribution room is, you can check by:

• Reviewing your latest Notice of Assessment (NOA). It shows your deduction limit based on the information you sent to the Canada Revenue Agency (CRA) with your tax return.
• Signing on or registering for an online account using CRA’s My Account online service Opens a new window..

An RRSP lets you invest more of your income and save on taxes in two ways:

Tax savings now: RRSP contributions reduce your taxable income, which may result in a tax refund. You can use the tax refund for any purpose. You may put the refund back into your RRSP if you have contribution room or use it to pay down debt.

Tax-sheltered growth: Investing in an RRSP has a much bigger impact on your savings than investing outside of one. This is because both the amount you contribute to your RRSP and the income it earns are sheltered from tax as long as the money stays in the plan. The withdrawals from an RRSP are taxable at the effective tax rate applicable at the time of receipt.

Tax Free Savings Account (TFSA)

What is a TFSA? It’s a registered savings vehicle that helps you grow your money faster because there are no taxes on income earned in the plan, or on withdrawals from a TFSA, provided you follow the rules.

You can have multiple TFSAs at various financial institutions, but the total of all amounts that you contribute to all TFSAs must not exceed your TFSA contribution room — otherwise penalties may apply.

It’s your responsibility to keep track of your TFSA contribution room so you don’t overcontribute. Like your RRSP limit, you can check your TFSA contribution room by reviewing your NOA, or you can sign in or register using CRA’s My Account online service Opens a new window.. 

Every year, the government may update the TFSA dollar limit Opens a new window.. For example, in 2025, the annual limit is $7,000. Remember that this limit is not the same as your TFSA contribution room.

If you can’t contribute up to the full amount of your TFSA contribution room in any given year, you can carry the unused room forward. This means if you’ve never had a TFSA, were at least 18 in 2009, and have been a Canadian resident since then, you can contribute up to $102,000 in 2025 because of the unused TFSA contribution room you’ve carried forward.

In addition, with a TFSA you can withdraw your money for any reason, at any time, tax-free. Amounts you withdraw are added back to your TFSA contribution room in the following year.

Non-registered investments

To save beyond the amount you can invest in your RRSP or TFSA, consider non-registered investments. Options include:

• GICs, which are available through your CIBC advisor
• Bonds, mutual funds, exchange-traded funds (EFTs) and stocks, which are available through CIBC Investor’s Edge

Please note that income earned in non-registered plans is taxable.

A CIBC advisor can help you determine how much you’ll need. It’s a matter of establishing the total income you’ll require in retirement, estimating your annual expenses, and considering other circumstances.

An important part of planning for retirement is thinking about what you can do now to try to achieve your personal and financial goals. Consider these tips to ensure you’re doing all you can today, for a better retirement tomorrow.

• Decide when you want to retire and the lifestyle you want to have.
• Talk to a CIBC advisor about creating a retirement plan for you.
• Use all your RRSP contribution room and maximize your TFSA contribution. Don’t wait until the March 3, 2025, deadline to make your 2024 RRSP contributions. Consider whether setting up automatic monthly contributions is right for you. For more on making the most of your TFSA and RRSP, read Jamie Golombek’s article RRSPs and TFSAs: Smart choices for business owners (PDF, 655 KB) Opens a new window.
• Have an idea about the approximate rate of return on your total investment portfolio. The estimated rate of return on your portfolio depends on the risk you are willing to take over time to reach your retirement income goal.
• The cost of goods and services increase over time. Factor in the impact of inflation.
• Consider a spousal RRSP to split income and possibly save taxes in retirement.

Start putting your retirement savings to work. Now is the time to talk to a CIBC business advisor and have a conversation about how much you need to save for retirement.

Check out these resources to further your retirement education:

• Wondering if RRSPs are the right move? Read Jamie Golombek’s article RRSPs and TFSAs: Smart choices for business owners (PDF, 655 KB) Opens a new window.
• Interested in tax rates? Read Jamie Golombek’s article It’s 2025: Do you know what your tax rate is? (PDF, 360 KB) Opens a new window.
• Interested in how your business can help you save for retirement? Learn more about how you can save for retirement as a small business owner and help your employees save for retirement