The Registered Retirement Savings Plan (RRSP) is a great place to put stocks that you plan to hold for years and even decades. Why?
When you deposit money into an RRSP, you get a tax rebate that you can use to reduce your income in a year. It can help drastically reduce your tax bill in any one year.
However, if you ever plan to withdraw from the RRSP, the Canada Revenue Agency (CRA) will treat that withdrawal as income in that year. If you are still earning close to or near your peak income, that could result in a substantial tax bill at the end of the year.
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The RRSP is best for holding long-term stocks
The point of the RRSP is that you save and hold investments until retirement. Once you retire, you can start to withdraw since your income will likely be lower.
The takeaway is to use your RRSP like a true retirement savings fund. Investments inside your RRSP are not taxed, so you can compound tax-free (until you withdraw).
It is a great place to invest with a long-term buy-and-hold mindset. If you are wondering what Canadian stocks to hold in an RRSP, here are four worth holding for years.
WSP: An RRSP stock with years of growth ahead
WSP Global (TSX:WSP) has built out a global engineering, design, project management, and advisory empire. Given its scale and breadth of expertise, it is a partner of choice for complex, multi-faceted projects.
Demand is high for its services. Companies and governments are challenged by factors like urbanization, digitization, climate change, and population growth. WSP recently announced a new three-year plan.
In that time, it is projecting 60% adjusted earnings per share growth driven by strong margin improvements and market expansion. This company still has a long horizon of growth, which makes it a great fit for an RRSP.
CIGI: A high quality stock for the years ahead
Colliers International Group (TSX:CIGI) is another long-term RRSP stock. In fact, it has become like a mini-WSP in recent years. Despite being a large commercial real estate firm, it is building a substantial engineering platform.
The company has also expanded into asset management in recent years. Neither of these quality businesses are properly reflected in its stock price today.
Colliers is known for its smart mergers and acquisitions capacity. I expect its highly invested management team will continue to drive shareholder value for the long term ahead.
TSU: A small insurance provider
Another quality RRSP stock is Trisura Group (TSX:TSU). While not many Canadians have heard of this company, it is building out specialty insurance platforms in Canada and the U.S.
It has several niche focuses that allow it to earn above-average returns on equity. Given it is still small, it could grow by a nice teens rate for years ahead.
The company has had some bumps in the road over the past two years. These appear to be in the past, and the stock should pick up on good execution ahead.
TOI: A serial software acquirer
Topicus.com (TSXV:TOI) is a great stock for compounding in your RRSP. Like its parent company, Constellation Software, it is acquiring specialized software companies, maximizing them for cash flow, and reinvesting the proceeds into more companies.
Topicus has a specific focus on Europe. With many countries, languages, and industries, there are plenty of focused software businesses for Topicus to acquire.
Recent purchases of non-controlling interests in larger listed businesses have already proven successful. The company is on an acquisition spree in 2025. This Canadian stock could still enjoy long-term compounding growth for a patient RRSP investor.
