RRSP ba­sics

The Su­per Seven ways to save and grow

The Guardian (Charlottetown) - - BUSINESS - This col­umn, writ­ten and pub­lished by In­vestors Group Fi­nan­cial Ser­vices Inc. and In­vestors Group Se­cu­ri­ties Inc., presents gen­eral in­for­ma­tion only and is not a so­lic­i­ta­tion to buy or sell any in­vest­ments. Con­tact your own ad­viser for spe­cific ad­vice ab

You al­ready know that one of the best re­tire­ment sav­ings strate­gies for most Cana­di­ans is a Reg­is­tered Re­tire­ment Sav­ings Plan (RRSP) — and, as this year’s RRSP con­tri­bu­tion dead­line nears, here is a su­per seven list of some of the best ways to get the most from your RRSP. 1. Beat that dead­line This year’s RRSP con­tri­bu­tion dead­line is Feb. 29 — don’t miss it! 2. Max­i­mize al­ways Make your max­i­mum con­tri­bu­tion each year — that’s how to get the most in im­me­di­ate tax sav­ings and in longterm growth.

You’ll find your con­tri­bu­tion room on your most re­cent no­tice of as­sess­ment from the Canada Rev­enue Agency (CRA). 3. Catch up Fill up un­used con­tri­bu­tion room.

You can do that in a sin­gle year or over a num­ber of years un­til you reach age 71. 4. Rise up To have more money in re­tire­ment, raise your RRSP con­tri­bu­tions as your in­come rises. 5. Bor­row to save An RRSP loan can be a good op­tion for max­i­miz­ing this year’s con­tri­bu­tion or catch­ing up on past con­tri­bu­tions but only if the in­ter­est rate is low and you pay it back as quickly as pos­si­ble.

A good way to do that: Use your RRSP tax sav­ings to help pay off the loan. 6. Di­ver­sify for growth Your max­i­mum RRSP con­tri­bu­tions are capped by the govern­ment - so to get the ad­di­tional in­come you’ll likely need to en­joy the re­tire­ment of your dreams, be sure to in­vest in a Tax-Free Sav­ings Ac­count (TFSA) and a well-bal­anced non-reg­is­tered port­fo­lio based on an as­set al­lo­ca­tion plan that matches your risk pro­file and time hori­zon. 7. Des­ig­nate Choose a ben­e­fi­ciary for your RRSP (in Québec, this must be done through a will). Gen­er­ally, RRSP as­sets with a ben­e­fi­ciary des­ig­na­tion do not form part of your es­tate and do not at­tract pro­bate fees. If your ben­e­fi­ciary is your spouse/part­ner or a dis­abled child/grand­child, your RRSP can be trans­ferred tax-de­ferred to your ben­e­fi­ciary’s reg­is­tered plan.

Sav­ing for re­tire­ment is an ab­so­lute ne­ces­sity - and an RRSP is a great way to do just that when it’s part of an over­all fi­nan­cial plan tailored to achieve your re­tire­ment dreams. Talk to your pro­fes­sional ad­viser.

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