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Maximizing Your RRSP for a Secure Retirement

Tips for building a nest egg to comfortably fund your golden years.

Canadians are increasingly relying on their own resources to fund their retirement dreams. Now more than ever, it’s important to have a long-term strategy to ensure that the retirement you envision can become a reality. When it comes to growing your registered retirement savings plan (RRSP), a little planning goes a very long way.

Maximize your contribution — and start early
While RRSP contribution limits vary according to one’s income, it’s important you try to contribute as much as you can to your RRSP each year to ensure you get the most out of your RRSP savings. Starting your RRSP contributions as soon as possible is also a good strategy because this gives your investments more time to grow tax-deferred before you need to access your savings.

Make your annual lump-sum contribution in January
By making a lump-sum contribution at the start of the year, investors can enjoy a full year of tax-free compounded growth. Over the years, all that added investment time can really make a positive impact on your RRSP’s bottom line. You can also contribute smaller amounts in regular intervals throughout the year with a pre-authorized purchase plan, which allows you to benefit from dollar-cost averaging.

Contribute to a spousal RRSP
Spousal RRSPs are a great way to split income with your spouse in retirement. By spreading the taxable income between the two of you, you may end up in a lower tax bracket, thereby reducing your family's taxable income.

Consider retiring later
With so many Canadians living longer healthier lives, it may make sense to defer your retirement and stay in the workforce a few extra years. Retiring later in your career gives your RRSP longer to grow, which means that you’ll need to save less for your retirement.

Work with a professional advisor
From home improvements to auto repairs, when you want the job done right it’s always best to bring in a professional. The same can be said for your investments. Research on the value of financial advice has shown that investors who work with a financial advisor tend to accumulate more wealth and have a greater feeling of confidence about their financial future versus those who don’t work with an advisor.1

Please contact us today to determine the best RRSP saving strategy to meet your unique needs.

1. New Evidence on the Value of Advice, 2012, Dr. John Cockerline (IFIC).

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