Registered Retirement Savings Plans (RRSPs) are amazing tools to help fund the relaxing and enjoyable retirement you want. To help you get the full retirement savings benefits consider these tips on how to maximize your RRSP.
Know Your Contribution Limit
Before getting into adding more to your RRSP, it’s important to know how much you can contribute yearly. The total amount each year is made up of your contribution limit for the current year plus any ‘carry-forward’ contribution room from previous years. Registering for My Account with CRA is a great starting point to see what your unused contribution room is or you can check your notice of assessment.
Pay Yourself First
Life is busy, and who has time to remember to transfer $100 every paycheck into their RRSP – setting up pre-authorized credits (PAC) is an easy and convenient way to start and maintain that nest egg growth. Now just because you set it up once doesn’t mean you shouldn’t review it regularly. Adding extra money whether it’s an annual bonus, inheritance, or raises – as your income grows, so can your RRSP contributions. Let your money earn money, giving your savings an extra boost.
Invest your RRSP
Depending on your risk appetite there are a wide range of investments within an RRSP depending on your type of plan – including stocks, bonds, guaranteed investment certifications (GICs), and mutual funds*.
Different investments perform in different ways over time Diversification is a great way to help smooth out your returns. You always have the flexibility to hold and move your money between these investments if your risk appetite or life changes.
Reinvest Your Refund
We know contributing to an RRSP helps reduce the amount of taxes you pay on your annual income – less taxes means more money available to save. But have you thought about reinvesting your annual tax refund back into your RRSP, your contribution reduces your taxable income so you’re more likely to receive a refund next year.
Ready to start maximizing your RRSP contributions? Book an appointment with an Advisor today.
*Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc.
