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Seven ways to add money to your RRSP

You already know the importance of a Registered Retirement Savings Plan (RRSP), and maybe you’ve even made a contribution or two. Now you want to add to your retirement savings, but don’t know where to find the money. Good news! You may have overlooked extra cash hiding in plain sight. 

Here are 7 tips to add money to your RRSP:

Pay off debts, and then reallocate that money
Will you meet a debt repayment goal partway through the year? When your student loan, car loan, or credit line balance payments end, don’t start spending that money. Instead, apply your payments to your RRSP.

Annual bonuses
Contribute some of your annual bonus towards retirement savings. Try splitting your after-tax bonus into thirds: contribute one third to your RRSP, one-third to debt repayment, and one-third on a family outing or special purchase to reward your hard work.

CPP/EI and other deduction payments
Once your gross earnings exceed the maximum Canadian Pension Plan/Employment Income (CPP/EI) income for the year (in 2019 the CPP maximum income will be $57,400 and the EI maximum annual insurable earnings will be $53,100), you’ll notice a net pay increase on your paystub as CPP/EI deductions are no longer withheld.

Apply the pay increase towards an automatic contribution to a high interest savings account where you can collect funds to make a lump sum contribution to your RRSP.

Tax refund
If you get a  refund when you file your taxes this year, allocate some or all of it to your RRSP. The key is to make your contribution as soon as the money hits your bank account - the longer it sits, the more tempting it will be to spend it.

Building retirement savings is a key part of your financial plan. If you prefer to jumpstart your retirement savings, an RRSP line of credit may be an affordable solution.

Monetary gifts
Do you ever receive money as a gift for birthdays, Christmas, or other special events? If so, earmark some or all of the funds as a retirement savings booster.

While increasing spending when you get a raise seems almost too easy, it takes some discipline to also increase savings.  As soon as you get your first post-raise paycheque, increase your automatic contribution to your RRSP.

Closet, garage, and basement
Scour your storage areas for gently used clothing, small appliances, sports equipment, and household items to sell online at sites such as eBay, Amazon, Kijiji, or even local Facebook sales pages.

Learn more about RRSPs or speak to a Meridian Advisor today.