Contributing to an RRSP after Age 71

In the March 2007 federal budget, the government introduced legislation that will allow an individual to hold a Registered Retirement Savings Plan (RRSP) until the year they turn 71.
Since an individual cannot own an RRSP past their 71st birthday, you would think they could no longer contribute to an RRSP after their 71st birthday.  However, this is not the case. While one cannot own an RRSP past the age of 71, one may still be able to make an RRSP contribution based on two (2) requirements.
  • FIRST: The individual must have earned income. Earned income as stated in the Canada Revenue Agency (CRA) publication “RRSPs and Other Registered Plans for Retirement”, includes employment income, net income from self employment, royalties for a work or invention of which you were the author or inventor, net rental income, taxable support payments such as alimony or separation allowances, net research grants received and disability payments under the Canada Pension Plan. Earned income does not include investment income, pension income, income from an RRSP or RRIF, Old Age Security and Canada Pension Plan payments.
  • SECOND: The individual needs in order to be able to contribute to an RRSP past the age of 71 is a spouse or common-law partner who is under the age of 71. If these two requirements are met, an individual who is over the age of 71 can then contribute to a spousal RRSP and deduct the contribution on their tax return.