The BUZZ - RRSP Season!

So Christmas is done, the trees are at the curb to be picked up and mulched. The next season is upon us quickly - RRSP season!

You may ask WHY, what is this all about? The ads will meet you every where you look - paper, TV and radio.

A Registered Retirement Savings Plan (RRSP) is an investment that is registered with the government for the purpose of allowing taxpayers to save for retirement in a tax sheltered environment.

In layman's terms it helps you save for your retirement with the theory when you take the money out in retirement your income tax will be lower so you pay less income tax at that time.

The best RRSP advice is: Start investing in an RRSP early, and put time to work for you! Consider a 20 year old who invests $2,500 each year for 15 years, until she turns 35, in an investment with a compound rate of return of 5%. If at the age of 35 she then keeps her money invested, but makes no further annual contributions she will have over $267,000 dollars saved by the time she retires at age 65.
Compare that to an investor who starts investing later in life, at age 35, and contributes $2,500 each year for 30 years. By age 65, this investor will have accumulated just over $166,000 in retirement savings. So make sure you start saving for retirement early in life – but remember – it’s never too late to start.

What are your RRSP contribution goals for 2010?