Got an hour? Get an RRSP!
If you don’t have an RRSP by now, it’s too late to get one before the deadline, right? Wrong!
Deadlines are a wonderful thing. Yes, they are. They give people the extra incentive to stop putting off the things that are important. So it’s great when the RRSP deadline is only a few days away: now’s the perfect time to get that ball rolling.
But deadlines can be scary, too. They can make you feel like there’s not enough time to think things through before making a commitment. Not to worry. If you’ve got an hour, you can have a trouble-free, no-risk RRSP. Read on to learn how.
Why should I have an RRSP?
An RRSP is like an umbrella, sheltering the investments underneath. Any income you put into an RRSP is sheltered from tax, and any interest or investment growth it gains while under that umbrella is also sheltered. Therefore money protected inside an RRSP helps you twice: by saving you tax right now, and by growing faster than a regular, taxable investment.
Contributing to an RRSP encourages you to save for your retirement, and makes your retirement savings grow faster.
I don’t have an RRSP yet – is it too late?
Not at all! Opening an RRSP account is just like opening an ordinary bank account. Simply go to the bank, say you want to open an RRSP, sign the papers, and within an hour you’ll have it. So go ahead: take your lunch hour and get an RRSP.
How am I going to figure out what kind of RRSP to get before the deadline?
The RRSP umbrella can shelter many different types of investment. If you don’t know where you want your money to go in the long run, you can still ‘park’ an RRSP contribution in a safe, short-term, easy-to-move investment now before the deadline, to buy you some time to think about it.
Financial advisor Mac Mekawi of Edward Jones Investments says parking your RRSP in a one-month GIC is the perfect solution. “It’s safe, and it has a guaranteed return,” he says. “You won’t make a lot of money in interest in that month, but you’ll get the tax break for beating the deadline and you’ll have a whole month in which to talk to someone and make your long term plans without pressure.”
What are you still reading this for? Go get an RRSP!
If you are old enough to get this Devo joke, you’re old enough to start saving for retirement. Depressing, but true.