The 2025 tax year has ended, and this is your last chance to make any tax savings. Doing your taxes pays you more than you can imagine with a Registered Retirement Savings Plan (RRSP).
What is the RRSP contribution deadline for the 2025 tax year?
The 2025 RRSP contribution limit is $32,490. The last day to make contributions for the 2025 tax year is March 3, 2026. Mark this date, as the investment can save you thousands of dollars in tax liability.
Let’s look at a scenario.
Mary has a taxable income of $182,500. She stalls tax planning and ends up paying a tax liability of $38,121. If she spends two days doing taxes and investing in an RRSP, she can reduce her tax rate from 29% to 26%.
| Taxable income threshold for 2025 | Tax rate | Mary’s Taxable Income | Mary’s Tax Amount | Mary’s Taxable Income after RRSP Contribution | Tax after RRSP contribution |
| $57,375 or less, plus | 15% | $57,375.00 | $8,606.25 | $57,375.00 | $8,606.25 |
| over $57,375 up to $114,750, plus | 20.50% | $57,375.00 | $11,761.88 | $57,375.00 | $11,761.88 |
| over $114,750 up to $177,882, plus | 26% | $63,132.00 | $16,414.32 | $35,260.00 | $9,167.60 |
| over $177,882 up to $2 | 29% | $4,618.00 | $1,339.22 | ||
| Total | $182,500.00 | $38,121.67 | $150,010.00 | $29,535.73 |
RRSP contributions reduce your taxable income. If Mary contributes $32,490 to her RRSP by March 2, 2026, her taxable income will reduce to $150,010, bringing in tax savings of $8,586.
That is not the only income. If you invest $32,490 RRSP contribution in some dividend stocks with compounding options like a dividend-reinvestment plan (DRIP), you can silently earn in the RRSP without lifting a finger.
Ideal investments for an RRSP
An RRSP allows you to invest in stocks, mutual funds, and exchange-traded funds of designated stock exchanges. While you get an immediate tax deduction and the investment grows tax-free in an RRSP, the withdrawals are added to your taxable income. Moreover, your RRSP has a maturity of December 31 of the year you turn 71. If you don’t close the account, the financial institution will deregister the account, and your entire RRSP amount will be added to your taxable income.
There, you have the option to shift to a Registered Retirement Income Fund (RRIF), where the financial institution will calculate the minimum amount based on your age at the beginning of each year and pay you that. You can withdraw more but not less, and RRIF payouts are taxable.
Considering that withdrawals are in small amounts and taxable, dividend stocks are ideal for RRSPs.
Top RRSP stock picks for 2026
CT REIT (TSX:CRT.UN) is an ideal investment choice for an RRSP as it gives a monthly payout and even offers a DRIP. The real estate investment trust’s unit price is not volatile, and you can opt for DRIP to reinvest the dividend amount tax-free. An annual dividend yield of 5.6% can become a sizeable income later. And even when you transfer funds to RRIF, the dividend will keep growing by 3%, ensuring your portfolio is never out of funds.
CT REIT’s unique benefit is its largest tenant and parent company, Canadian Tire. The parent ensured an occupancy of over 90% and an assured rent increase of 1.5%. The REIT has a dividend-payout ratio of 73.1% in the first nine months of 2025. This gives it the flexibility to grow dividends even if occupancy falls.
Telus (TSX:T) is another good RRSP investment with a DRIP. The company has temporarily paused its dividend growth as it strengthens its balance sheet. However, it will resume to 3-8% dividend growth once its debt comes in the target range. It can grow your RRSP and ensure dividend returns continue, even when you transfer the funds to RRIF.
Telus has a 21-year dividend-growth history and can pay dividends for another 21 years, making it ideal for RRSP, whether your retirement is this year or 15 years from now.
Investor takeaway
Now is the perfect time to buy the two stocks. You have less than 40 days to arrange for the funds and boost your RRSP portfolio. After March 3, 2026, any contributions to the RRSP will count towards the 2026 tax year.
