Canadians use their self-directed Registered Retirement Savings Plan (RRSP) to build investment portfolios that can provide retirement income which complements CPP, OAS, and work pensions.
One popular RRSP investing strategy involves owning top dividend-growth stocks and using the distributions to buy new shares. This sets off a powerful compounding process that can turn modest initial investments into meaningful savings over time.
RRSP basics
Your RRSP contribution in a given year is equal to 18% of earned income in the previous tax year. For example, a person with 2025 income of $100,000 would have $18,000 in RRSP contribution space in 2026. There is a cap for high earners, however. That amount for 2025 is $32,490.
RRSP contributions reduce taxable income for the relevant year. This provides the most benefit to people who are in the highest marginal tax rates. Investments held inside the RRSP can grow tax-free, but taxes are paid…
