New Immigration Rule Affects Your RRSP: Here’s What You Need to Know.

It’s not just about saving for retirement anymore. It’s about protecting your investments while navigating changing immigration rules.

If you’ve ever thought, “How will moving to Canada affect my RRSP?” or “Will this impact my retirement money?”, this is the blog for you.

What is an RRSP? 

An RRSP (Registered Retirement Savings Plan) is a Canadian account that lets you reduce your taxes now when you contribute, while your investments grow tax-deferred until you withdraw later. Your annual “room” is usually 18% of last year’s earned income up to the CRA limit, unused room carries forward, and contributions made in the first 60 days of a year can count for the previous tax year.

For many Nigerians in Canada, the Registered Retirement Savings Plan (RRSP) is a key part of financial planning. It’s not just a savings account, it’s your future, a tax-advantaged vehicle to build wealth, and a fallback after years of hard work. But here’s the catch: immigration changes are shaping how much you can legally work while studying, when you’re considered a Canadian tax resident, and how withdrawals are taxed if you later become a non-resident all of which can affect RRSP contributions, deductions, and outcomes. Work off campus as an international student - Canada.ca •CRA residency: Determining your residency status - Canada.ca.

The Changing Landscape for RRSPs and Immigration

 RRSPs are designed for Canadians to save tax-deferred for retirement. Normally, you can deposit money, grow it tax-deferred, and pay taxes only when withdrawing. However, immigration status and tax residency can affect how much RRSP room you build and how withdrawals are taxed if you leave Canada. Your RRSP contribution room is based largely on earned income while you are a Canadian tax resident and is generally calculated as 18% of last year’s earned income up to the annual dollar limit (2025 limit: $32,490) with carry-forward of unused room. How contributions affect your RRSP deduction limit - Canada.ca CRA: “What’s new”

At the same time, IRCC has clarified off-campus work rules for international students, which influences how much legal earned income you can report in a study term and that income is exactly what builds RRSP room for the following year.

What the New Immigration Rule Means for You.

1. Residency now sits at the center of your RRSP room.

 Your ability to contribute to an RRSP goes beyond age and Canadian pay slips, it depends on being a Canadian tax resident for the year you earn income. Many temporary residents (study/work permit holders) are tax residents based on their ties, so they can build room once they have earned income in Canada. 

2. Work-hour clarity can increase the income that creates next year’s RRSP room.

 When IRCC sets a clear off-campus work cap during academic sessions (with different rules on scheduled breaks), it gives you a predictable way to earn and report income, which then generates RRSP room the following year. 

3. Withholding tax on withdrawals for non-residents remains a key risk.

 If you leave Canada or become a non-resident later, RRSP withdrawals are generally subject to withholding tax (often 25% unless a tax treaty reduces it). That’s why timing withdrawals and deciding whether to keep your RRSP while abroad  needs a plan. CRA non-resident withholding. [Tax rates on withdrawal]

4. RRSP maturity and conversion still require attention. 

By the end of the year you turn 71, you must convert your RRSP to a RRIF or annuity; newcomers and non-residents should plan the conversion and any withdrawals with residency and treaty rules in mind so you don’t trigger avoidable tax. RRSP/RRIF dates.

Why This Matters to Nigerians in Canada

 For newcomers and immigrants, RRSPs represent one of the best ways to save on taxes and build retirement security but immigration rules, work-hour limits, and residency changes can affect those benefits. You might lose contribution opportunities in low-income years if you don’t legally work or aren’t a tax resident; unexpected withholding could reduce your RRSP funds if you withdraw after leaving; and lack of clear information can lead to costly mistakes when planning your retirement or moving money cross-border. Understanding the intersection now helps you keep more of your money later.

What You Can Do Right Now

 ✅ Understand your residency status 

Your residency for tax purposes drives RRSP eligibility and how withdrawals are taxed. Review CRA’s residency guidance (and consider NR73 if you’re unsure). Determining your residency status - Canada.ca

✅ Plan contributions and withdrawals strategically

 Build RRSP room with clean earned income as a tax resident; consider contributing now and claiming the deduction later in a higher bracket (common after PGWP). If you expect to leave Canada, model the impact of non-resident withholding and decide whether to withdraw as a resident or keep funds for later. RRSP dates (first-60-days rule, Non-resident withholding

✅ Use RRSP programs the smart way 

The Home Buyers’ Plan (HBP) lets you withdraw for a first home and repay to your RRSP over time; the Lifelong Learning Plan (LLP) lets you fund eligible education with scheduled repayments both without immediate tax when used properly. •HBP •LLP

✅ Don’t overcontribute

 More than $2,000 over your limit can trigger a 1% per month penalty until corrected. Always check your RRSP room in CRA “My Account” before you move money. RRSP room & limits:

✅ Talk to a licensed financial advisor

Where immigration rules and tax law meet, personal facts matter. An advisor who understands newcomer situations can help time contributions, choose deduction years, and plan for moves across borders. Bank explainers can also help you prep questions: RBC RRSP overview, RBC RRSP overview

Why Timely Action Matters

 Ignoring the immigration–RRSP connection risks losing valuable room, paying unnecessary withholding tax, or rushing into last-minute decisions. Planning early helps you maximize benefits, avoid penalties, and keep your savings intact whether you remain in Canada or move again.