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Individual RRSPs

An Individual RRSP Plan follows the original basic plan as established by the Canadian Government in 1957. This is a type of RRSP that is set up by an individual where the account is registered in the individual’s name.

The individual is considered to be both the plan’s contributor and annuitant. The contributor is the individual that is permitted to make contributions to the plan and subsequently record the contributions in their respective income tax return. The plan’s annuitant is the individual that will receive the benefit of the capital and income withdrawn from the plan. The annuitant is the individual that is permitted to withdraw monies from the plan and includes the withdrawals as taxable income in their respective income tax return.

Note: An Individual RRSP has only one individual that is both the plan’s contributor and its annuitant. No one else can make contributions to the account and no one else can withdraw money from the account. Contributions into and withdrawals out of an individual RRSP are recorded in the individual’s income tax return.

Example: If Bob and Mary are married and Mary wishes to open an RRSP to accumulate savings for her retirement, then she would open an Individual RRSP in her name. Mary would be listed as the plan’s contributor and all of her contributions would be recorded in her annual income tax returns. Mary would also be listed as the plan’s annuitant and all future withdrawals from the plan would also be recorded in Mary’s annual income tax return. Bob has no connection to Mary’s Individual RRSP. The following flowchart illustrates this type of Individual RRSP contribution/withdrawal process:

 

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