Registered Retirement Savings Account

Created and offered by the federal government of Canada since 1957 when it was first available and originally called the registered retirement annuity. The goal of creating the RRSP was to allow Canadians to save for their future retirement and provide an additional benefit of lowering the taxable obligations for the year the contributions were made by deferring those obligations to a later time when they would begin drawing from those savings ( retirement ). RRSP accounts are highly beneficial to individuals who are high earners and are in a higher income tax bracket with an elevated tax burden.

HOW IT WORKS
Contributions are tax-deferred meaning that income tax is exempt on the amount of that year's total contribution amount.

i.e.;
a contribution is made in the fiscal year 2021, the contribution is equal to 18% of the earned ( gross ) revenue in the fiscal year 2020 which was $65,000.00, the total dollar amount of the contribution is $11,700.00 and this dollar amount is deducted from the total earned ( gross ) income of 2020 resulting in a lower taxable income.
($65,000.00*previous year earned income -$11,700.00*current year contribution =$53,300.00*taxable income)
*An accountant will include this contribution amount on your income tax filing.

There are rules regarding the use of an RRSP
RRSP-RULES: ELIGIBILITY, CONTRIBUTIONS, DURATION & WITHDRAWALS, (minimums/maximums)

ELIGIBILITY: Any and all Canadian citizens or permanent residents employed and filing an annual income tax return. ( there is no specified minimum age )

CONTRIBUTIONS: According to the CRA a maximum of 18% ( the account holder decides what percentage/amount they contribute)of the previous year's earned income is allowed. In 2020 the maximum contribution in dollars is (was) $29,210.00, if this amount is exceeded the excess is subject to a penalty enforced by the Canada Revenue Agency ( CRA ). read more
The CRA establishes these amounts and announces any changes made.

DURATION: An account holder can make contributions and continue until they reach age 71. The CRA requires withdrawals to begin when the account holder is age 71 ( their 71st birthday ) at which time the RRSP must be converted to a Registered Retirement Income Fund ( RRIF ) from which withdrawals will be made.

WITHDRAWALS: Just as there are maximum contributions to respect, there are also minimum and maximum withdrawals that apply. The CRA recently made changes, they lowered the minimum allowable yearly ( age-specific ) withdrawal amount. read more 

Let's talk about Integration
When a person arrives at retirement, regardless of the age at which they retire, they begin receiving pension cheques from either the Canadian Pension Plan ( CPP ) or the Quebec Pension Plan ( QPP ) and also the old age supplement ( OAS - if they qualify ), all the amounts must be included on the annual income tax return. Integration means that all income is integrated as a taxable income and the individual is taxed on that income. Also included are whatever amounts you receive from your RRIF, those amounts are integrated as part of your income.

RRSP ELIGIBLE PROGRAMS:

*Home Buyers Plan read more
*Lifelong Learning Program read more

Conclusion
Opening and contributing to an RRSP throughout your lifetime is beneficial and can be of great help to accumulate savings while you are working, starting and raising a family, building a business, or whatever plans you have/are involved in, throughout your working life. If an RRSP is managed properly from the beginning and throughout, all will be well when retirement is reached. However, if the setup and management are not done properly and carefully, the taxable impact many years later will be considerable, all will not be well.
A good strategy ( there are many ) is to open and always maximize your TFSA account first, ( unless you are a high-income earner and want to reduce your annual taxable obligations ) and then, consider contributing to an RRSP.