Almost all financial institutions offer RRSPs, so it is worth shopping around for a plan that meets your investment needs of risk, return and cost.
Contributions you make in a year (and the first 60 days of the following year) are deducted from taxable income, and will almost certainly result in a refund at your marginal rate.
Investments within an RRSP grow tax free.
Within limits, you can use funds from an RRSP before you retire to help with a first time home purchase or to fund continuing education.
Otherwise any withdrawal is taxable.
An RRSP must be collapsed by the end of the year in which you turn 71.
When you collapse your RRSP, one of your options is to convert it into a Registered Retirement Income Fund (RRIF).
You have to withdraw some of a RRIF each year, and this amount is taxable.
However, your income usually is lower than when you were contributing, so there is a net saving of tax.
Long-term planning can effectively save even more tax if a couple expect to have different marginal tax rates in the future.
The higher earning spouse makes a payment into the RRSP of the lower earning one and claims a refund at their higher marginal rate.
As long as there is a minimum of three years after the last spousal contribution, the lower earning partner can withdraw funds from the RRSP and pay tax at their lower marginal rate.
The amount you are allowed of contribute to an RRSP is a function of your previous years' earnings and contributions. Your contribution limit is shown on your tax assessment.
This also means that in your first year in Canada you are not allowed to contribute anything. Your contribution limit is $0. CRA tolerates a set amount of "over-contributions" for which no penalty applies. This amount could vary, so best to check on the CRA website. Currently, this amount is $2000. Other circumstances where the CRA do not penalize over-contributions are where you are required to make contributions as a clause in your employment contract, or where your excess contributions of one year are less than your contribution limit in the following year.
This is one in a series of BE Wiki articles about Taxation.