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1. 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. 2. Contribute early in the year to maximize growth. You can contribute to your RRSP from January 1 of any calendar year until 60 days into the following year. If you have the money, make your contribution for the year as early as possible instead of waiting until the 60th day of the following year. Your plan will benefit from up to 14 extra months of tax-deferred compounded growth for every contribution.
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