From February 16 to 19, 2010, MoneySense.ca’s top financial planners are answering your RRSP questions. For the full list of questions answered — or to submit a question of your own — click here.

I am 47 years old and new to Canada. I would like to work up to about 60 years of age. If I were to put aside just $200 a month, should I put this amount into an RRSP or TFSA? How do I go about choosing an institution dealing in these plans? — Ninan Mathews

Karin Mizgala: I’m assuming that the $200 a month savings is for your retirement.  If so, and you earn more than $40,000 a year, I recommend you open an RSP account at your bank or credit union. Set up automatic monthly withdrawals from your bank account to your RSP to make it easier to stay on track with your savings goal. If you earn less than $40,000, use the same approach with a TFSA instead.

Given that you have 13 years before retirement, your best bet is to invest in a mix of stock and bond index funds (assuming you are comfortable with market flucutations). If your financial institution doesn’t offer index funds, check out TD’s E-series index funds. Learn more about low cost investing at Investors-aid.coop or read “The complete couch potato roadmap”.

Next question: Not paying income tax this year — should I withdraw?

Back to main RRSP Q&A page.

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