Increase your retirement capital this RRSP SeasonJanuary 7, 2019
Planning for your retirement can be overwhelming. The average Canadian investor is now enjoying a longer life, and extremely volatile equity markets and low interest rates may render their traditional investment choices (i.e. stocks and bonds) inapt at helping them achieve their retirement goals.
RRSPs continue to be one of the most significant tax-saving opportunities available to individual Canadians – and one of the most effective ways of saving for retirement.
This RRSP season, consider these ways to increase your wealth at the time of your retirement:
Contribute the maximum
For 2019, the RRSP limit is: $26,500.
Make an annual lump sum contribution at the beginning of the year
This allows your RRSP contribution to have a full year of tax-deferred growth.
Contribute early in life
Starting early will give your investments more time to grow tax-deferred.
Make use of asset allocation
Maximize the return on your investments while minimizing the risk using different asset categories.
Earn a higher rate of return
Even a small difference makes a big impact over a period of several years.
Reinvest your tax refund to take advantage of unused RRSP room
If you take your tax refund from last year and add it to your annual RRSP contribution for the current year – this increased investment can increase your tax refund in the current year.
Contribute to a spousal RRSP
Spousal RRSPs are a great way to split income with your spouse in retirement. This can result in a lower tax bill.
Set a target
Determine your desired retirement lifestyle. Defining this objective will allow you to set a savings target for your RRSP and will let you gauge your progress.
RRSP season is a good time to review your overall wealth management plan. Market conditions change and influence our financial plans, so do our lifestyles, careers, and our short and long-term goals. All the more reason to commit to a regular financial check-up, a review of your wealth management plan and your actual activities to measure how they are aligning with your retirement needs and goals.