By the Sun Life team
Are you waiting for the deadline to contribute to an RRSP? There’s a more accessible, stress-free way to save for retirement.
Again this year, you are wondering when the RRSP contribution deadline is. You’re right to save for retirement, but there’s a more innovative way to do it. Contribute to your RRSP regularly throughout the year.
Thereby :
you reap the benefits of growth over a more extended period;
you avoid choosing your investments hastily;
and if you contribute by automatic deduction, you won’t even have to think about it.
What is the deadline for contributing to an RRSP in 2022?
March 1, 2022, is the deadline to contribute to an RRSP for the 2021 tax year. But you don’t have to wait until that date to act. It is even better to avoid doing it at the last minute. Here’s why…
Why should you avoid contributing to an RRSP at the last minute?
Investing in your RRSP all-year-round pays off.
By investing throughout the year, you can grow your retirement savings. In addition, you avoid running as the deadline approaches. Alain’s story illustrates this well.
Here is Alan. He collected all the dollars he could find—those in his savings account, his piggy bank and even those hidden under the sofa cushions.
The RRSP contribution deadline is approaching. Alain rushes to bring his hard-earned money to Sarah, his adviser. He knows that his money grows tax-free in an RRSP until he withdraws it.
Sarah is delighted to see that Alain contributes to his RRSP. An RRSP is an essential investment for the future. But in his opinion, contributing a large sum at the last minute is not the most innovative way to contribute.
Why is it not advisable to wait for the deadline to contribute to your RRSP?
Sarah suggests that Alain make smaller contributions but do it all year round. Thus, Alain’s savings will grow faster because they will be made over a more extended period.
What is dollar-cost averaging, and why is it a winning strategy?
There is another exciting aspect to investing in an RRSP regularly, explains Sarah. This is called dollar-cost averaging*.
- This method consists of investing regularly, assuming that the markets will fluctuate. Thus, the same amount can be used, for example, to buy fewer shares of mutual funds when their value is high and more when they are lower.
