Max Out This Year´s RRSP Contribution: Tips & Tricks | Refresh Financial

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Tips and Tricks To Max Out This Year’s RRSP Contribution

Tips and Tricks to Max out RRSP'sMarch marks a new year for RRSP contributions, which leaves you little time to max out this year’s additions to your Registered Retirement Savings Plan. It’s about this time some of us tend to scramble to find ways to increase this year’s contribution, considering loans and finding every extra cent to throw at it. There are some hacks that make it a little bit easier to make sure you’re maxing out your contributions. Here are several that can make this year’s RRSP contribution as big as possible:

1. Take advantage of employer matched contributions

This is basically free cash from your boss. Check with your HR department and find out how you cash in on this employee benefit. Make sure you’re getting every cent possible this way, otherwise you’re throwing money away. Many Canadians unknowingly overlook this common benefit. Be savvy and take advantage of it!

2. Windfalls

Any extra money that you have not accounted for in your monthly budget is a great source for your RRSP contributions. Perhaps you inherited some money recently, or maybe you got an insurance settlement. Maybe your job performance earned you a sizeable bonus. Whatever the source, this bonus money can be quite useful in maxing out your contributions.

3. Talk to your financial institution

Your bank or credit union is going to be able to look at your financial situation and suggest what is best for you. They may see a way to move some money around to make a bigger contribution, and they will also be a great source of figuring out what your contribution limit is and that you do not go over it, helping you avoid any penalties.

4. Automate your contributions year-long

Use the convenience of technology to do all the remembering and hard work for you. While this won’t help you for 2016, it is a new habit you can start for 2017.

5. Be careful considering loans

Chances are you’re here with us on Refresh Financial’s blog because you’re looking for ways to get out of debt, increase your credit score, and save for the future. Jumping into another debt will increase your credit usage, potentially lower your credit score, and stick you with another minimum monthly payment that could be hard to deal with. Consider very carefully the pros and cons of taking out an unsecured loan for RRSP contributions.

6. Consider ways to save money

Refresh Financial's credit building program builds your credit score while helping you save money. This way, you’ll increase your credit score at the same time as saving some money to throw at your RRSPs. This is another good tactic to consider for 2017. For more info on Refresh's programs, click here.

While maxing out your RRSP contributions is great for your future, don’t let it overshadow your efforts to pay down your debts. Paying debts is also going to benefit you in the future by saving you a tonne in interest and increasing your disposable income, which can then be put into your RRSP in the future. Do not stop knocking down your debt to max out your RRSP contributions. Get rid of debt first, if you can.

Do you contribute to an RRSP? Let us know in the comments!

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