Canadians have until March 2 to contribute to their Registered Retirement Savings Plan (RRSP) for the 2025 tax year, giving savers a final opportunity to lower their taxable income and boost their retirement nest egg.

This year, Canadians can contribute up to $32,490, or 18 per cent of their 2024 earned income, whichever is less.

At the same time, Canadians are increasingly feeling pinched when it comes to retirement planning. According to a BMO survey, Canadians now believe they need $1.7 million to retire comfortably, yet over one-third (36 per cent) feel it’s unlikely they’ll meet that goal.

With uncertainty weighing on long-term savings plans, experts say it’s critical to make the most of your RRSP each year. Here are some tips to consider:

For married or common-law partners, spousal RRSPs can be useful in reducing tax upon retirement, particularly if one partner falls within a lower tax bracket or is expected to be in a lower tax bracket upon RRSP withdrawal, says Aurèle Courcelles, vice-president of tax and estate planning at IG Wealth Management.

With a spousal RRSP, the higher-income spouse contributes to an RRSP in their partner’s name but claims the tax deduction on their own return, Courcelles says. The deduction reduces income that would otherwise be taxed at its highest rate. In retirement, withdrawals are generally taxed to the lower-income spouse, which can reduce the couple’s overall tax bill.

Yannick Lemay, tax specialist at H&R Block Canada, warns that the amount the higher earner can contribute is dependent on their own contribution room, not their partner’s. If the higher earner isn’t careful, they could max out their own contribution allotment and receive a penalty tax.

“If they don’t have any room to contribute to their RRSP, they can’t contribute to their spouse’s RRSP,” he said.

If cash flow is tight ahead of the deadline, Canadians with money in a Tax-Free Savings Account (TFSA) may be able to use those funds to boost their RRSP contribution, Courcelles says.

For example, someone could withdraw $5,000 from their TFSA tax-free and contribute that amount to their RRSP. The contribution entitles you to a tax deduction and a possible refund. The following year, the $5,000 withdrawn is added back to their available TFSA contribution room, along with the new annual TFSA limit.

This can be a safer alternative than taking out an RRSP loan, where you’re left with a debt obligation and interest that isn’t tax-deductible.

Some Canadians assume they must claim their RRSP deduction immediately, but contributing and deducting are two separate decisions.

Lemay says the timing of the deduction can matter, especially for those expecting their income to rise, such as graduating students. Claiming the deduction while in a lower tax bracket only offsets income taxed at that lower rate.

Instead, someone could contribute now but delay claiming the deduction until a future year when their income and marginal tax rate are higher. That way, the deduction offsets income that would otherwise be taxed more heavily.

However, even if you choose to delay claiming the deduction, you must still report the contribution on your tax return for the year, Lemay adds. The Canada Revenue Agency will track it as an unused deduction that can be applied later.

RRSP contributions reduce taxable income, and some Canadians may receive a tax refund as a result. That refund reflects taxes already paid before the deduction was applied, rather than additional income.

While it can be tempting to treat the refund as “fun money,” a better strategy is to reinvest it, Courcelles says.

Ideally, you would make another RRSP or TFSA contribution, he says. If both are already maxed out, which is unlikely for most Canadians, consider investing the funds in a non-registered account.

While many Canadians focus on the March deadline, Courcelles says RRSP planning should not be confined to a few weeks each year.

Waiting until the deadline can mean missing out on tax-deferred growth. The sooner money is contributed, the longer it has to compound inside the RRSP without being taxed.

Courcelles says Canadians should be asking themselves: “Can I start making monthly contributions now to get ahead of the game? Because the faster I can get that money in an RRSP, the more it’s tax sheltered.”