Six tips to make the most of your RRSP

Saving for retirement doesn’t have to be challenging\n\nAn RRSP is a type of investment account that allows you to reduce the tax payable on your current income when you save it for the future.\n\n1. Plan your retirement goals.\n\nWhat kind of lifestyle do you want to live in retirement? Start making goals now, and meet with your financial advisor to ensure your security as you enjoy a long and fulfilling retirement.\n\n2. Invest early for higher growth. \n\nInvesting in your RRSP well in advance of retirement means that your money has more time to benefit from tax-sheltered growth.\n\n3. Leverage your tax refund.\n\nRemember that RRSPs aren’t tax-free, they are tax-deferred – so as tempting as it might be to spend your tax refund, reinvesting it will work to your long-term advantage.\n\n4. Contribute now, deduct later.\n\nYou don’t have to claim deductions on your RRSP contributions in the same year that you make them. If you are expecting a future increase in taxable income that will push you into a higher tax bracket, you can defer claiming deductions until later to benefit from a higher tax refund.\n\n5. More room to invest in your future.\n\nExcess contribution room left over from contributions made under the annual limit can be carried forward indefinitely for use in future years.\n\n6. Lighten the tax load.\n\nIncome splitting is a way for couples to reduce overall taxes in retirement. It involves shifting up to 50% of eligible pension income from a higher-income spouse to a lower-income spouse.\n