RRSP season is here!
It’s February and you know what that means- if you haven’t made your RRSP contribution for this year, the clock is ticking down (the deadline is March 1, 2017). Make your contribution today and avoid the last-minute frenzy at the end of the month. Or better yet, make plans for the year ahead so that you don’t have to scramble next February.
More important than ever
With the increase of part-time and contract jobs, retirement pensions are being scaled back, which means that there is a good chance that more Canadians are going to be more responsible for funding their own retirement. If you wait too long to save, you may have to work longer or retire with debt- which isn’t ideal.
The benefits of RRSP investing
You may feel like retirement is way too far away to even think about, but you are well advised to get going- today. Not only will you get in the healthy habit of saving over time, you’ll take advantage of your total investment growing over time as well.
Your investment grows tax free until you make withdrawals (generally when you are retired). You’ll also reduce your taxable income for your contribution.
Not just for retirement
Although RRSPs are meant for retirement, they are also great savings vehicles to help you reach more short and medium term goals. As a first time homebuyer you can withdraw funds tax-free to use for your down payment, with an agreement to pay them back over time. This can help you reduce mortgage debt today, which can actually help you boost your savings for the future (because you’ll have more cash flow).
It’s easy too
The easiest way to get going with your RRSP savings is to enroll in a monthly contribution program, either through your employer or through your financial institution. By this time next year, you’ll have a tidy sum accumulated and you won’t have to line up at the bank in February.