Core Insights - The article explains the Registered Retirement Savings Plan (RRSP) as a tax-advantaged account for retirement savings, allowing contributions from various sources and investment types [2][3]. Contribution Limits - The annual RRSP contribution limits have been outlined for the years 2015 to 2026, showing a steady increase from $24,930 in 2015 to $33,810 in 2026 [4]. - Contribution limits are based on the previous year's income and can be carried over if not fully utilized [5]. Types of RRSPs - There are individual, spousal, and group RRSPs, with individual accounts allowing for personal investment control and tax deductions [6]. Contribution Deadlines - The RRSP contribution deadline for the 2025 tax year is March 2, 2026, due to March 1 falling on a Sunday [7]. Over-Contribution Penalties - Over-contributions exceeding $2,000 incur a penalty tax of 1% per month on the excess amount until withdrawn [8]. Age Limit for Contributions - Contributions to an RRSP can be made until December 31 of the year the individual turns 71, after which funds must be converted to a Registered Retirement Income Fund (RRIF) or annuity [9]. Eligible Investments - RRSPs can hold various investments, including cash, GICs, mutual funds, ETFs, and stocks, but not cryptocurrencies [11][12]. Withdrawal Programs - The Home Buyers' Plan (HBP) allows tax-free withdrawals up to $60,000 for first-time home purchases, while the Lifelong Learning Plan (LLP) permits withdrawals up to $20,000 for education costs [14][15]. Contribution Calculation - Individuals can contribute up to 18% of their previous year's income, with the possibility of exceeding this limit due to carryover of unused contribution room [16].

Group 1: Overview of GICs - Guaranteed Investment Certificates (GICs) have over $500 billion of Canadians' money invested, gaining popularity due to rising interest rates offering returns above 5% [3][20] - GICs have been a traditional investment choice for retirees focused on wealth preservation, but younger investors are increasingly using them as well [4][6] - GICs are issued by financial institutions, providing a guaranteed return and principal protection up to $100,000 per category, per institution through the Canada Deposit Insurance Corporation (CDIC) [4][8] Group 2: Investment Considerations - Investors must consider term length and whether to choose redeemable or non-redeemable GICs, as longer terms typically yield higher rates [6][8] - Liquidity is a significant factor; traditional GICs are locked until maturity, which can be limiting for investors needing quick access to cash [5][7] - GICs may not be risk-free, especially if investors have uncertain short-term cash needs, as they could miss opportunities for better returns elsewhere [8][20] Group 3: Alternatives to GICs - Money Market ETFs are presented as a more liquid alternative for managing cash, investing in short-term, high-quality debt, and allowing for trading during market hours [9][10] - BMO's Money Market ETF (ZMMK) yields around 2.6%, while ultra-short-term fixed income ETFs like BMO Ultra Short-Term Bond ETF (ZST) offer slightly higher yields with slightly more risk [11][12] - Investors should consider the tax implications of interest income from GICs and ETFs, and the potential benefits of holding these investments in tax-advantaged accounts [16][18] Group 4: Long-Term Considerations - While GICs may provide short-term safety, they risk losing buying power over the long run due to inflation, which can erode returns [22][23] - Historically, equity markets have outperformed fixed income investments over long time horizons, suggesting that GICs may not be suitable for long-term growth [22][23] - Investors should evaluate their cash needs and risk profiles when deciding between GICs and other investment options, considering both pre-tax interest rates and inflation [25][26]