Ottawa’s RRSP-for-life plan: what it means for Canadian seniors | CBC

A change to retirement accounts

An RRSP lets Canadians defer tax on savings and investments until retirement. It can hold assets such as cash, stocks, GICs and ETFs. Under current rules, many people convert an RRSP to a RRIF by age 71 rather than cashing out and facing tax. The budget proposal would allow an RRSP to remain open for the account holder’s lifetime.

Paperwork and contribution limits

Jamie Golombek of CIBC Private Wealth Management said the proposal could spare people the administrative work involved in switching accounts. He described the idea as having an RRSP “until the day you die.” Finance Minister François-Philippe Champagne’s press secretary, John Fragos, confirmed that the proposal would not allow contributions after age 71. Golombek also said paperwork that is missed could create problems for people.

Wider retirement concerns remain

The change would not resolve other challenges facing seniors. One expert cited in the report estimates that only 33 to 37 per cent of Canadians have access to a pension.

Mandatory withdrawals from RRSPs can also make it harder to manage income and may lead to higher taxes. Golombek said merging RRSPs and RRIFs, or eliminating the RRIF, could still be years away.

Consultation underway

The public consultation on the proposal began Thursday and is scheduled to continue until Jan. 8, 2027. The budget presents the change as a way to simplify retirement planning for seniors.