The countdown for Registered Retirement Savings Plan (RRSP) users to contribute and claim tax deductions is coming to an end. With the window closing fast, will you meet the March 2, 2026, deadline?
Substantial immediate tax savings are still possible with a last-minute contribution on or before the deadline. The maximum RRSP limit for the income year 2025 is $32,490 or 18% of your earned income in 2024, whichever is lower. RRSP contributions matter because they are a Canadian’s legal shield against taxable income.
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Full potential of your RRSP
The RRSP is the premier investment account primarily focused on financial security in retirement. It boasts a dual advantage for account holders: immediate tax relief and long-term tax-deferred growth. The tax deduction or refund becomes part of the investible capital for wealth creation purposes.
Qualified investments in an RRSP include guaranteed investment certificates (GICs), government bonds, mutual funds, exchange-traded funds (ETFs), and stocks. Dividend stocks, in particular, are preferred holdings to maximize the power of compounding.
Also, the U.S.-Canada tax treaty allows RRSP holders to hold American stocks without tax consequences. The U.S. waives the 15% foreign withholding tax on dividends paid by U.S. companies. Unfortunately, the IRS doesn’t consider the Tax-Free Savings Account (TFSA) a retirement or pension plan.
Dividend pioneer
The Bank of Montreal (TSX: BMO), Canada’s oldest bank, is synonymous with financial security for retirement planners. This $129 billion financial institution, also the TSX’s dividend pioneer, has a 196-year dividend track record. No retiree can outlive this incredible feat. If you invest today, BMO trades at $199.76 per share and pays a 3.3% dividend. The quarterly payout ensures steady RRSP growth.
Its dividend history makes BMO the ideal retirement anchor. In December 2025, the bank announced a 5% dividend hike for Q1 fiscal 2026. The Canada Revenue Agency (CRA) does not tax present dividends or future quarterly payouts. You can create a “compounding snowball” by reinvesting the dividends without adding new capital.
In fiscal 2025 (12 months ending October 31, 2025), net income increased 19% year-over-year to $7.3 billion. The acquisition and integration of Bank of the West expanded BMO’s U.S. footprint. In Q4 fiscal 2025, net income of the U.S. banking segment climbed 187% to $807 million versus Q4 fiscal 2024.
Dividend grower
Manulife Financial (TSX: MFC), also in the financial sector, is the perfect complement to BMO in an RRSP. The iconic insurer is a dividend grower, as evidenced by 13 consecutive years of dividend increases. On February 11, 2026, MFC announced a 10.2% increase to its quarterly dividend. At $50.16 per share, the dividend offer is 3.6%.
Its President and CEO, Phil Witherington, describes 2025 as a defining year for Manulife. The $75.5 billion financial services company reported a record $7.5 billion in core earnings. Business growth leans toward Asia and Global Wealth Asset Management (WAM), currently the main drivers of earnings growth.
Formidable combination
This dividend pioneer and dividend grower are buy-and-hold assets and a formidable combination for your 2026 RRSP. If finances allow, you can still lower your tax bill this tax season by investing in either one and making a final contribution.
