Canadians encouraged to meet with RSP advisors early

Scotiabank News Release

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With the RSP deadline less than six weeks away, Scotiabank encourages Canadians to take the time now to meet with their advisor to discuss their RSPs and avoid the last minute rush.

“Whether they lost money in the markets, or avoided investing altogether, investors should use the RSP season as an opportunity to have those important conversations with their advisors to help them focus on their short and long-term investment plans,” said Winnie Go, Senior Wealth Advisor, ScotiaMcLeod.

Ms. Go offers five key tips to help Canadians make the most of the RSP season.

Five Tips for this RSP Season:

1. Review your financial plan

Your financial plan should be reviewed at least once a year to make sure you’re still on track to meet your investment and lifestyle objectives. Meeting with an advisor will help ensure that you’re in the best position to meet your financial goals.


2. Borrow to invest

If you’ve accumulated RSP contribution room over the years (this is unused RSP contribution room carried forward from previous years), and you’d like to catch up on these unused RSP contributions, consider borrowing money through a low-rate line of credit. With a RSP Catch-Up Line of Credit or loan you can still take full advantage of your RSP contribution even if you don’t have extra funds to make a contribution this year. Investors can check their Notice of Assessment from the Canada Revenue Agency every year to see how much unused RSP contribution room they have available.

3. Contribute to a Spousal RSP

A spousal RSP is an account into which one spouse makes contributions to the other spouse’s RSP who is in a lower tax bracket than the owner of the account.

Typically, the higher income spouse will contribute to a spousal RSP and receive a tax deduction at a high marginal tax rate. Then, in retirement or earlier, when the other spouse withdraws that money, it will generally be taxed at a lower tax rate. When used correctly, spousal RSPs can be an effective tool in planning for a couple's retirement.


4. Always maximize your RRSP contributions.

The contribution deadline for the 2009 tax year is March 1, 2010.


5. Invest on a Regular Basis

Get off to a good start for 2010 by having your money automatically transferred from your bank account to an RSP or savings fund on a regular basis (if you don’t already). It’s the easiest, most convenient and disciplined way to reach your goals. By doing this, investors can benefit from dollar cost averaging by purchasing equities or mutual funds throughout the year.

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