Getting the most out of your RRSP

RRSPs can be an integral part of your overall financial strategy. They are a great way to help reduce your taxable income and save for the future at the same time. But how can you ensure you’re getting the most out of your RRSPs?

While there is no one-size-fits-all solution when trying to determine how to get the most out of your RRSP, it’s important to work with a financial advisor to determine what makes sense for your specific situation.

Below are a few ideas you can consider in your discussions with your financial advisor:

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Start early. Time is one of your greatest assets, so take advantage of it. The longer you save the more opportunity you have for your investments to grow.

Contribute regularly. Set up a plan to invest according to your specific situation. It can help make contributing less stressful.

Give your RRSP an annual raise. As you progress in your career and income, make sure you increase your contribution amount to your RRSP (as long as you’re within your limit). The more money you save, the more funds you will have at retirement.

Reinvest your tax refund into your RRSP or TFSA (Tax-Free Savings Account) rather than making a large purchase. It could be a good time to re-evaluate some of your larger purchases.

Take advantage of employer contributions. There are fewinvestment options that can compare with the value of your employer’s match and its role it can have on your retirement strategy. Even if your ability to save may be modest, you should take advantage of the full employer match, if available.

Ultimately, there is no simple answer for the question of how to get the most out of your RRSP. Each investor’s situation differs, and what may work for one investor might not make the most sense for you and your financial goals.

Speak with a financial advisor to understand the importance of an RRSP and the role it may play in your long-term financial strategy.