Money's top RRSP tips

Here are some tips to consider before the March 1, 2010 RRSP contribution deadline:

-Slow and steady wins the race

By making contributions every payday, your employer can deduct less tax off every pay cheque. The difference made by investing regularly throughout the year instead of a lump sum at deadline time can add up to $18,052 over 40 years, according to HSBC Investment Funds Canada.

-Just got hitched? Know your role

Take advantage of a spousal RRSP and split your income for a potentially higher tax savings. Typically, it pays for the higher income earner to contribute to the spousal RRSP and claim the tax deduction. The funds accumulate there free of tax until they are withdrawn by the lower income spouse.

-Be patient. Defer your deductions

Consider deferring your deduction until a later tax year if you are expecting an income jump in the near future.

-Organization is key

Be sure to keep all your contribution receipts. You’ll need them to claim related deductions on your income tax return.

-Know your limits

The maximum allowable RRSP contribution this year is 18% of your 2009 income, up to $21,000. Also, be careful when making any catch-up contributions, as there are limits to the maximum allowable deduction.

-Strength in numbers

Check if your employer has a Group RRSP plan and watch your savings grow even faster.

-Simple math pays off

Include the fees of opening and managing an RRSP account into your estimates to avoid any unwelcome surprises.

-Consider your debt

Every new year, investors are encouraged to take out a loan or line of credit to contribute to their RRSP. This could be a wise strategy but only if interest rates are low (they’ve never been lower) and if you’re sure to pay off the loan within a year.