4 Simple Ways To Put More $$$ Into Your RRSP
Life can be overwhelmingly busy, not to mention expensive! Between work, kids, and every day struggles, it’s hard to start thinking about saving for retirement. But remember, even if you’re feeling tight on cash, saving for a good retirement is crucial to your own happiness.
Here are a couple of helpful tactics to squeeze more savings into your RRSP without feeling totally strapped for cash:
1. Make your contributions at the beginning of the tax year
By contributing to your RRSP at the end of the tax year, you miss out on a year’s worth of compound growth.
For example: You’re contributing $6,000 annually for 25 years, at 3% compounded annually.
If you make contributions at the:
- Start of tax year: $225,318
- End of tax year: $218,756
That is a huge sum of money that you could be missing out on, just by not being organized!
2. Find out if your employers offer to match RRSP contributions
Some companies have an RRSP matching program. It never hurts to ask, so check with HR to see if this option is available to you, and how your RRSP matching plan works. This is basically free money that contributes to your retirement savings.
3. Get more tax reductions
If you make regular RRSP contributions, you can fill out a T1213 and request to have fewer tax dollars deducted from your pay cheque. If you have a little extra money each month, it will be much easier to put it into an RRSP right away
4. Contribute today and defer your deductions
In the case that you’re expecting a big raise next year, you might want to consider deferring your RRSP deductions by a year. By contributing today, and saving your deductions for when you’re making a higher income, you can save on taxes.
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