Going to miss the March 1 RRSP contribution deadline or simply didn’t save as much as you wanted this year? Don’t lose hope — you can come out swinging in 2010 if you plan ahead.
John Nardi, a financial adviser with Edward Jones, says even if you haven’t met your RRSP goals this year, it’s important to pick yourself up and evaluate how you can move forward.
“Don’t get discouraged. Find out why you missed the deadline, take a step back and think, ‘Why did I not accomplish my goals?’ You need to have long-term goals in mind and now is an opportunity to sit down and review them with an adviser,” Nardi said.
Rosanna De Jong, manager of financial planning with RBC in Edmonton, says changing your mindset is key — good financial planning is not as much about deadlines as it is about steady commitment. Your money starts working for you the moment you put it into your RRSP, so waiting until the yearly deadline actually means you lose out on up to a year of potential growth.
“Don’t wait to contribute. Contributing early gives your savings more time to grow,” De Jong said.
Nardi agrees, saying in an ideal world, you’d want to make your entire contribution for the coming year in March. While most people would be hard-pressed to make such a large contribution after just putting the previous year’s money into their RRSP, for people who missed the deadline March can be an enormous opportunity to get a head-start on growth.
Regular, consistent contributing can also go a lot further than scrambling to find money at the end of the year, so both Nardi and De Jong suggest setting up monthly contributions to your RRSP so you can spread the load over the course of the year. Having the money withdrawn automatically will ensure you have enough at year’s end, and your money will start growing faster.
RBC financial planner Mario Muzzo says you shouldn’t let short-term shifts in the market shy you away from long-term investing. Stick to your investment plan and you’ll be able to weather changes.
“Don’t be scared or deterred from the markets or investments in general by what’s going on; look at your own situation, stay within your comfort zone and stick to your savings plan,” Muzzo said. “Chances are on your side that you’ll be successful more often than not.”