We’re nearly halfway through February, which means RRSP season is upon us. It’s that time of year when we look for ways to make or increase RRSP contributions before the annual deadline, which falls this year on Feb. 29.
But don’t panic. If you want to know what your RRSP is supposed to look like—whether you’re a young saver just starting out or in the final sprint toward retirement—check out MoneySense‘s RRSP guide for savvy investors.
In the meantime, here are five simple ways to boost your RRSP:
1. Just do it
I doubt that Nike had your retirement savings in mind when they came up with their iconic slogan, but they were certainly on to something. Just go ahead and bump up your regular RRSP contributions by $10 or $20 dollars each time. Most people find it easy to adapt to the reduced cash flow, because we make those sorts of adjustments all the time. Whenever the price of our morning coffee at Timmies goes up, we all moan and complain, but come Monday morning the drive-thrus are still 10 cars deep and we somehow find a way to come up with the extra change for our caffeine fixes. The same goes for those increased RRSP contributions.
2. Redirect extra cash
The Canadian energy sector may be taking a beating, but your gas budget is sure catching a break. Take advantage of any savings you can find to pump up your contribution levels. For example, if your weekly fill-up is costing you $10 to $15 less, why not redirect the money you previously spent at the pumps into your RRSP? That’s an extra $45 month. It adds up.
3. Increase automatic contributions
Get a raise at work recently? Congratulations! Before you go out and buy yourself something frilly, channel some of that well-deserved raise into what will someday be a well-deserved retirement by increasing those automatic RRSP contributions. A powerful rule of thumb: Try to dedicate at least 50% of any pay increases towards your retirement.
4. Use a windfall
The same goes whenever you come into a sizeable chunk of money—such as an inheritance, a severance or perhaps when you sold your unopened 1959 Barbie doll—take some or all of this money and slip it into your RRSP.
5. Repurpose your mortgage payments
There are lots of great things about finally paying off your mortgage. One, YOU JUST PAID OFF YOUR MORTGAGE! Two, no more mortgage payments means you have a great opportunity to ramp up your retirement savings. Now’s the time to put some or all of the money that had been going towards mortgage payments directly into your retirement fund.
There are lots of different ways to find a little extra money for your RSP. That little boost now can mean a big difference to your future RSP balance. So get boosting!