Maximizing Your RRSP: Expert Insights from Wiegers Financial & Benefits
As life evolves, so do your financial priorities. At Wiegers Financial & Benefits, we recognize the significance of optimizing your Registered Retirement Savings Plan (RRSP) to help secure your future. By taking a personalized and strategic approach, we ensure your financial plan adapts to your changing needs. In this article, financial planner Kim Chicoine shares valuable tips to help you get the most out of your RRSP and work toward a more confident retirement.
Aligning Your Savings with Your Financial Objectives
Balancing daily expenses with long-term savings can be challenging, but watching your investments grow over time makes it worthwhile. To make the most of your RRSP, consider diversifying with a mix of investment options such as guaranteed investment certificates (GICs), mutual funds, segregated funds, stocks, and bonds. These choices, when integrated into your RRSP or Tax-Free Savings Account (TFSA), can align with your risk tolerance and financial goals.
Proven RRSP Strategies to Enhance Your Savings
Automate Your Contributions for Consistent Growth
A simple yet effective way to stay on track with savings is by setting up a Pre-Authorized Chequing (PAC) plan. This method ensures your RRSP contributions happen automatically, treating them like a fixed expense. By contributing regularly, you benefit from dollar-cost averaging, which helps smooth out market fluctuations. You can also schedule annual contribution increases, allowing your savings to grow progressively over time.
Leverage an RRSP Loan to Maximize Contributions
If you haven’t taken full advantage of your RRSP contribution room in previous years, an RRSP loan can be a useful tool. This approach provides additional time for your investments to grow while potentially yielding a tax refund that can help repay the loan. While not suitable for everyone, an RRSP loan can offer key benefits such as:
Accelerating your retirement savings
Potentially increasing your overall retirement fund
Lowering your taxable income through a larger deduction
Consider a Spousal RRSP for Tax Efficiency
For couples, a spousal RRSP can be a strategic way to optimize retirement savings and minimize taxes. The higher-income spouse contributes to the plan and claims the tax deduction, while the lower-income spouse holds ownership of the account. This strategy can help balance income levels in retirement and reduce overall tax liability. However, it’s essential to understand the withdrawal rules, especially for contributions made in the last two years. Consulting with a financial advisor can help determine if this approach suits your situation.
The Importance of Starting Early
Although RRSP season may still be ahead, making contributions early allows your investments more time to benefit from compound growth. Regular contributions not only enhance your retirement fund but also foster disciplined saving habits. If you’re unsure which strategies best fit your financial picture, speaking with an advisor can provide clarity and guidance tailored to your needs.
At Wiegers Financial & Benefits, we’re committed to helping you develop an RRSP strategy that aligns with your long-term financial objectives. Take action today and begin building a secure future.
Kim Chicoine, CFP, B.Comm.
Insurance Representative, Wiegers Financial and Insurance Planning Services Ltd.
Financial Planner, Manulife Wealth Inc.
The opinions expressed in this article are those of the author and do not necessarily reflect those of Manulife Wealth Inc.