Wednesday, January 9, 2013

Does making your annual RRSP contribution leave you feeling uneasy?

The Bank of Montreal recently released a study which found that almost half of respondents to the survey -- 49 per cent -- who make an annual RRSP contribution, do so in a lump sum.

The uneasiness around the March 1 deadline is understandable when Canadians have to deal with other financial priorities, said Marlena Pospiech, senior manager BMO Wealth Planning Group.  "If they haven't saved regularly it could be really hard, especially coming out of the holiday season and if they have racked up a lot of debt over that time."

While it is important to save for your financial goals, it doesn't need to be stressful.  Monthly contribution plans can take the stress out of trying to come up with lump-sum contribution, and even if you find that you can't put aside as much as you would have liked, contribute something.  Something truly is better than nothing when you consider the tax-deferred compound growth that will make your money work harder for you.

Another option may be an RRSP loan.  While borrowing to invest isn't for everyone, it can be a great option for those who want take advantage of unused RRSP contribution room.

There are many RRSP strategies that can work for you – the right ones, incorporated into your overall financial plan, will help you save on taxes every year, retire with more and enhance your estate. Talk to your professional advisor about what’s best for you.


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