RRSPs are widely considered one of the most valuable investment tools for planning your retirement in Canada. We’ve addressed the differences between RRSPs and TFSAs before, and this month we’re discussing the best ways to maximize your RRSP contributions. If you’ve reached the conclusion that focusing on an RRSP is the best decision for your financial situation currently, we can help!


Automate Your Contributions

Your maximum RRSP contribution amounts to 18% of your income earned in the previous year. Many Canadians diligently work to reach their maximum contribution room in January and February, ahead of tax filing deadlines. However, to minimize your financial stress, it’s important to stay on top of contributing to your RRSP all year round. It’s far easier to reach your yearly maximum contribution when you’re making consistent contributions each month, or each paycheque.

Automating regular RRSP contributions takes all the effort out of regular savings. Whether you use a group RRSP through your employer, or whether you set up an automatic monthly contribution through your bank, you’ll be glad you automated the process when tax season arrives.


Contribute Over and Above Group RRSP Matching

While not all employers offer this benefit, make sure you’re taking full advantage of any group RRSP matching programs available to you through your employer. Any pensions or RRSP matching offered at your place of work will add up to a tremendous benefit for your RRSP over time, and will make it easier to maximize your contributions each year.  Many experts encourage savers to think beyond just the matching of their group RRSP. If you can contribute beyond the 3% amount that your employer matches, your future self will thank you.


Keep Track of Unused Contribution Room

Either on your own, or with the help of a wealth management or tax planning professional, pay attention to the years that you aren’t able to max out your RRSP. Years may occur, especially early in your career, when other financial priorities may prevent you from using your full contribution room. Don’t forget that unused contribution room can be carried forward to later years, and take advantage of the extra room in particularly successful years.


Seek the Advice of a Wealth Manager

Many people, if they don’t have the extra income to make an RRSP contribution, will borrow from other sources. This decision is a very personal one that depends on a variety of variables, and is best made with the assistance of an experienced wealth manager or financial professional. While many valuable resources exist to help Canadians make informed decisions about their wealth and finances, nothing can replace the wisdom of a wealth manager who can help you make decisions based on your unique financial goals.

Remember, there’s no substitute for the personalized advice of a certified investment counselor or portfolio manager. Our experts at Rae Lipskie can provide investment plans and strategies tailored to your unique financial goals. For questions on RRSP planning and all things investment-related, contact us!