RRSPs

An RRSP is a retirement plan that is registered with Canada Revenue Agency, and that you or your spouse or common-law partner establish and contribute to. Deductible RRSP contributions can be used to reduce your tax.

Any income you earn in the RRSP is usually exempt from tax for the time the funds remain in the plan. However, you generally have to pay tax when you cash in, make withdrawals, or receive payments from the plan.

Your RRSP deduction limit is shown on the latest Notice of Assessment, Notice of Reassessment, or on a T1028, Your RRSP Information for 2008, that Canada Revenue Agency sent you after processing your previous years' income tax return.

You may make contributions up to December 31 in the year that you turn age 71.

You may want to set up a spousal or common-law partner RRSP. This type of plan can help ensure that retirement income is more evenly split between both of you. The benefit is greatest if a higher-income spouse or common-law partner contributes to an RRSP for a lower-income spouse or common-law partner. The contributor receives the short term benefit of the tax deduction for the contributions, while the annuitant (spouse receiving the funds), who is likely to be in a lower tax bracket during retirement, receives the income and reports it on his or her tax return.

For more information go to the Canada Renenue Agency website
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/rrsps-eng.html